At what interest rate would the given be a fair deal

Reference no: EM132032161

Question: The Perpetual Life Insurance Co. is trying to sell you an investment policy that will pay you and your heirs $12,500 per year forever.

If the required return on this investment is 4.7 percent, how much will you pay for the policy? (Round your answer to 2 decimal places, e.g., 32.16.)

Present value $

Suppose the Perpetual Life Insurance Co. told you the policy costs $270,000. At what interest rate would this be a fair deal? (Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)

Interest rate

Reference no: EM132032161

Questions Cloud

Eliminate the potential for the phc tax : Per the text, the personal holding company (PHC) tax penalizes taxpayers who enter into tax-motivated transactions designed to shelter passive income.

Calculate the current yield using given data : A perpetual bond with a par value of $1,000.00 and a semiannual coupon has a nominal yield to maturity of 5.20% and a current price of $1,055.00.

Find the percentage change in price for zero coupon bond : What is the percentage change in price for a zero coupon bond if the yield changes from 7.5% to 8.5%? The bond has a face value of $1,000 and it matures.

How does poverty affect the functioning of the family system : Knowing and understanding of the multiple influences on the development and learning of children.

At what interest rate would the given be a fair deal : Suppose the Perpetual Life Insurance Co. told you the policy costs $270,000. At what interest rate would this be a fair deal? (Enter your answer as a percent.

Find the monthly average seasonal funds requirements : Divide the firm's monthly total funds requirement (total assets) into a permanent and a seasonal component. Find the monthly average (1) permanent.

Describe the market in terms of its anticipated growth : Describe your rationale for selecting the target markets that you did. State why these markets are attractive to you as a marketer.

Describe how business accounts for purchase of a building : Describe how a business accounts for the purchase of a building. What is depreciation? Describe how depreciation is calculated

Identify the message you want the reader to receive : Creating a strong resume is a crucial component in any successful job search.

User Account

All Pages