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You are 35 today. You are looking into buying a retirement annuity contract which will pay...

You are 35 today. You are looking into buying a retirement annuity contract which will pay you a constant $10,000 per year, at the start of each year, for 15 years when you retire at 67. If the insurer marketing this contract has a cost of capital of 12%, how much will the fair market value of the contract be today?

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Answer #1

Please refer to below spreadsheet for calculation and answer. Cell reference also provided.

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