What should you be willing to pay today for this


1. An insurance company offers you an end of year annuity of $35,000 per year for the next 5 years. They claim your return on the annuity is 8 percent. What should you be willing to pay today for this annuity?

2. You borrow $149,000 to buy a house. The mortgage rate is 4.0% and the loan period is 15 years. Payments are made monthly. If you pay for the house according to the loan agreement, how much total interest will you pay?

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Financial Management: What should you be willing to pay today for this
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