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    Calculating the fair value of given annuity

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    You have a chance to buy an annuity that pays $5,000 at the beginning of each year for 5 years. You could earn 4.5% on your money in other investments with equal risk. What is the most you should pay for the annuity?

    a. $20,701

    b. $21,791

    c. $22,938

    d. $24,085

    e. $25,289

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    https://brainmass.com/business/annuity/calculating-fair-value-given-annuity-413506

    Solution Summary

    The solution calculates the appropriate value of given annuity.

    $2.19

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