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 2 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?

Posted Date: May 18, 2024 08:08 AM

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A national financial institution is currently offering $50,000 a year for life as a special promotion. Current

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