An insurance company offers an immediate annuity to one of your clients, where he will get...
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An insurance company offers an immediate annuity to one of your clients, where he will get monthly payments of $1600 for as long as he lives at the cost of $258,244.00. a) What is the implied rate of return if your client were to live for 20 years? b) Is it a good deal? (Note: tricky question) An insurance company offers an immediate annuity to one of your clients, where he will get monthly payments of $1600 for as long as he lives at the cost of $258,244.00. a) What is the implied rate of return if your client were to live for 20 years? b) Is it a good deal? (Note: tricky question)
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a To calculate the implied rate of return we need to use the formula Implied rate of return Monthly ... View the full answer
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