Dr. Garcia is thinking about retiring this year and has asked us if we want to buy her practice. She would like annual income of $250,000 for the next 30 years. If we can put the purchase price in an annuity that earns 4 percent per year compounded annually.

What is the purchase price necessary to guarantee her desired income? 

What other factors should we consider before buying a physician practice? What is your recommendation?

Answer rating: 100% (QA)

ANSWER To calculate the purchase price necessary to guarantee Dr Garcias desired income we can use the present value formula for an annuity PV PMT x 1 ... View the full answer