What rate of return would be earning

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Problem 1: Lisa Simpson wants to have $1200000 in 35 years by making equal annual end-of-the-year deposits into a tax-deferred account paying 10 percent annually. What must Lisa's annual deposit? be?

Problem 2: Your folks just called and would like some advice from you. An insurance agent just called them and offered them the opportunity to purchase an annuity for $17,067.35 that will pay them $2,500 per year for 20 years. They don't have the slightest idea what return they would be making on their investment of $17,067.35. What rate of return would they be earning?

Reference no: EM132689030

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