Annuity to retiring professors

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Reference no: EM131014836

Professor’s Annuity Corp. offers a lifetime annuity to retiring professors. For a payment of $70,000 ("present value") at age 65, the firm will pay the retiring professor $500 a month until death. If the professor’s remaining life expectancy is 20 years, what is the (implied) APR on this annuity? What’s the implied EAR?

Reference no: EM131014836

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