At what interest rate would this be a fair deal

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Moe's Life Insurance Co. is trying to sell you an investment policy that will pay you and your heirs $10,000 per year forever. If the required return on this investment is 9 percent, how much will you pay for the policy? Suppose Moe's told you the policy costs $120,000. At what interest rate would this be a fair deal?

Reference no: EM13282666

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