Assume That You Own an Annuity That Will Pay You

question 89

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.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)8.41%

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Definitions:

Sequential Stages

The concept that many processes, including psychological and social ones, occur in a specific, ordered series of steps or phases.

Observing Children

The practice of closely watching and noting the behavior, development, or actions of children in order to understand or assess their physical, cognitive, or emotional growth.

Intrinsic Motivation

The drive to perform activities for their own sake and personal rewards, rather than for external rewards.

Shaping

The learning process in which an agent initially reinforces any behavior that remotely resembles the desired response and subsequently requires increasing correspondence between the learner’s behavior and the desired response before providing reinforcement.