Fair value of given annuity

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Reference no: EM1329731

You have a chance to buy an annuity that pays $5,000 at the beginning of each year for 5 years. You could earn 4.5% on your money in other investments with equal risk. What is the most you should pay for the annuity?

a. $20,701

b. $21,791

c. $22,938

d. $24,085

e. $25,289

Reference no: EM1329731

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