Question: You can buy an annuity contract that will pay you $1,000 a year (end of year) for the next 10 years. The contract costs $6,000

You can buy an annuity contract that will pay you $1,000 a year (end of year) for the next 10 years. The contract costs $6,000 today. If you think you should earn 6 percent on such investments, should you buy the contract? Explain, showing your analysis.

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