# In the previous problem, suppose the Perpetual Life Insurance Co. told you the policy costs $58,000. At

## Question:

In the previous problem, suppose the Perpetual Life Insurance Co. told you the policy costs $58,000. At what interest rate would this be a fair deal?

**Data from problem 10**

The Perpetual Life Insurance Co. is trying to sell you an investment policy that will pay you and your heirs $5,000 per year forever. If the required return on this investment is 9 percent, how much will you pay for the policy?

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**Related Book For**

## Fundamentals Of Corporate Finance

**ISBN:** 9780072553079

6th Edition

**Authors:** Stephen A. Ross, Randolph Westerfield, Bradford D. Jordan