Solved: Required rate of return between the two alternatives, Finance Basics

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Required rate of return between the two alternatives

Problem:

Upon retirement, you are offered a choice between a $250,000 lump sum payment or a lifetime annuity of $51,200. If you expect to live for 15 years after retirement, at what required rate of return would you be indifferent between the two alternatives?

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Finance Basics: Required rate of return between the two alternatives

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