Present value of annuity


Problem: A local bank advertises the following deal: "Pay us $100 a year for 10 years and then we will pay you (or your beneficiaries) $100 a year forever." Is this a good deal if the interest rate available on other deposits is 6 percent?

Solution Preview :

Prepared by a verified Expert
Macroeconomics: Present value of annuity
Reference No:- TGS01746927

Now Priced at $20 (50% Discount)

Recommended (95%)

Rated (4.7/5)