After Receiving a Reward for Information Leading to the Arrest

question 73

Multiple Choice

After receiving a reward for information leading to the arrest of a notorious criminal, you are considering investing it in an annuity that pays $5,000 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) $50,753
• B) $53,424
• C) $56,236
• D) $59,195
• E) $62,311

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Definitions:

Federal Deposit Insurance Corporation

A U.S. government agency created to maintain stability and public confidence in the nation’s financial system by insuring deposits, examining and supervising financial institutions for safety, and managing receiverships.

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The process or requirement by which an individual or business must obtain permission from a governmental entity to carry out certain activities.

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