Problem:
The Good Life Insurance Co. wants to sell you an annuity which will pay you $730 per quarter for 25 years. You want to earn a minimum rate of return of 5.8 percent.
Required:
Question: What is the most you are willing to pay as a lump sum today to buy this annuity?
- $44,072.46
- $45,359.57
- $38,047.43
- $39,628.47
- $38,411.83
Note: Explain all steps comprehensively.