Chris Seals has just given an insurance company $56,521. In return, she will receive an annuity of

Question:

Chris Seals has just given an insurance company $56,521. In return, she will receive an annuity of $7,500 for 12 years.
a. At what rate of return must the insurance company invest this $56,521 to make the annual payments?
b. What rate of return is required if the annuity is payable at the beginning of each year?

Annuity
An annuity is a series of equal payment made at equal intervals during a period of time. In other words annuity is a contract between insurer and insurance company in which insurer make a lump-sum payment or a series of payment and, in return,...

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