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1. You just inherited some money, and a broker offers to sell you an annuity that pays $4,300 at the end of each year for 20 years. You could earn 5% on your money in other investments with equal risk. What is the most you should pay for the annuity?

a. $61,625.63

b. $53,051.63

c. $60,018.01

d. $52,515.75

e. $53,587.50

2. What is the PV of an ordinary annuity with 5 payments of $6,200 if the appropriate interest rate is 4.5%?

a. $22,863.00

b. $27,217.86

c. $30,211.82

d. $21,502.11

e. $30,484.00

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92653519

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