Assume That You Own an Annuity That Will Pay You

question 99

Multiple Choice

Assume that you own an annuity that will pay you $15,000 per year for 12 years,with the first payment being made today.You need money today to start a new business,and your uncle offers to give you $120,000 for the annuity.If you sell it,what rate of return would your uncle earn on his investment?

• A)6.85%
• B)7.21%
• C)7.59%
• D)7.99%
• E)8.41%

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