Explore BrainMass

Explore BrainMass

    Calculating the fair value of given annuity

    This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

    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

    © BrainMass Inc. brainmass.com June 4, 2020, 1:40 am ad1c9bdddf

    Solution Summary

    The solution calculates the appropriate value of given annuity.