Purchase Solution

Calculating the Rate of Return for Annuities

Not what you're looking for?

Ask Custom Question

Your insurance agent is trying to sell you an annuity that costs $230,000 today. By buying this annuity, your agent promises that you will receive payments of $1,225 a month for the next 30 years. What is the rate of return on this investment?

Purchase this Solution

Solution Summary

This solution calculates the rate of return on the investment.

Solution Preview

230,000 = 1,225 * (1- [1/30*12/ (1+r/12) / r/12
30 * 12 / 12 - 230,000 = 1,225
Calculator function = PMT FV 1,225 = 4.93%.

We must use a combination of ...

Purchase this Solution

Free BrainMass Quizzes
Basics of corporate finance

These questions will test you on your knowledge of finance.

Basic Social Media Concepts

The quiz will test your knowledge on basic social media concepts.


This tests some key elements of major motivation theories.

Writing Business Plans

This quiz will test your understanding of how to write good business plans, the usual components of a good plan, purposes, terms, and writing style tips.

Situational Leadership

This quiz will help you better understand Situational Leadership and its theories.