You Have a Chance to Buy an Annuity That Pays

question 63

Multiple Choice

You have a chance to buy an annuity that pays $1,200 at the end of each year for 3 years.You could earn 5.5% on your money in other investments with equal risk.What is the most you should pay for the annuity?

• A)$2,775.77
• B)$2,921.86
• C)$3,075.64
• D)$3,237.52

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Definitions:

Phosphine

A toxic, flammable gas composed of phosphorus and hydrogen, used as an insecticide and in various industrial processes.

Lewis Structure

Diagrams that show the bonding between atoms of a molecule and the lone pairs of electrons that may exist in the molecule.

Aniline

An organic compound with the formula C6H5NH2, used as a precursor to many industrial chemicals, particularly in dye manufacturing.

Aromatic Compound

Organic compounds that contain a planar unsaturated ring of atoms that exhibits a higher degree of stability due to resonance structures.