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Find what are willing to pay as a lump sum today

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Reference no: EM132900172

Problem 1: The Good Life Insurance Co. wants to sell you an annuity which will pay you $500 per quarter for 25 years. You want to earn a minimum annual rate of return of 5.5 percent. What is the most you are willing to pay as a lump sum today to buy this annuity? Hint: Make sure you convert the annual rate of 5.5% to a quarterly rate.

A. $26,988.16
B. $27,082.94
C. $27,455.33
D. $28,450.67
E. $28,806.30

Reference no: EM132900172

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