Assume That You Own an Annuity That Will Pay You

question 60

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 $156,000 for the annuity.If you sell it,what rate of return would your uncle earn on his investment?

• A) 3.31%
• B) 2.77%
• C) 2.42%
• D) 2.72%
• E) 2.15%

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Definitions:

Datum Axis

Datum Axis refers to an imaginary line, plane, or point referenced in manufacturing and design to measure the geometry of parts and assemblies for precise construction.

Total Runout

The comprehensive deviation of a surface from its true rotational path, measured along and around the surface.

Circular Element

A geometric element that has a circular shape, often used in the design and analysis of structures and mechanisms.

Part

A component of a larger assembly or system.