A national financial institution is currently offering $50,000 a year for life as a special promotion. Current
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A national financial institution is currently offering $50,000 a year for life as a special promotion. Current inflation is percent a year, and the real rate of return is assumed to be 3 percent. One could suggest that this financial institution would receive a 2 percent premium for the risk inherent in its long term investments. Assuming you will live forever, how much will this promise cost the financial institution today when you win?
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Related Book For 
Foundations of Financial Management
ISBN: 978-1259024979
10th Canadian edition
Authors: Stanley Block, Geoffrey Hirt, Bartley Danielsen, Doug Short, Michael Perretta
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