Annuities - Investment for a group of physicians
Question # 00795890
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Updated on: 02/26/2021 10:16 AM Due on: 02/26/2021
Annuities - Investment for a group of physicians
A representative of a reputable financial services company has approached you as a manager of a four-person group of anesthesiologists with an opportunity to purchase a 10-year annuity due for each member of the group. The annuity due would pay $40,000 each year beginning 5 years from now (i.e. at time = 5). What is the most you would be willing to pay now, per each physician, for this investment? Assume an appropriate discount rate of 7%.
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Solution: Annuities - Investment for a group of physicians