Assume That You Own an Annuity That Will Pay You

question 121

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 open a new restaurant, 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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Definitions:

Team Training

Structured educational or developmental activities designed to enhance the performance, cooperation, and skills of a team.

Expert Power

The influence and authority someone gains from possessing specific knowledge or expertise.

Social Power

is the capacity of an individual or group to influence the behavior, attitudes, or outcomes of others, typically within a social hierarchy or organization.

Position Power

The authority and influence attributed to a person's role or position within an organization.