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IceJOKER [234]
3 years ago
11

Larry’s Life Insurance Co. is trying to sell you an investment policy that will pay you and your heirs $32,000 per year forever.

Assume the required return on this investment is 7.2 percent.
How much will you pay for the policy? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
Business
1 answer:
Harman [31]3 years ago
4 0

Answer:

$444,444.44

Explanation:

Larry's life insurance corporation is trying to sell an investment policy that will pay you and your heirs a total amount of $32,000 per year

The required return on this investment is 7.2%

= 7.2/100

= 0.072

Since the cash flow is a perpetuity then, the amount that will be paid for the policy can be calculated as follows

PV= C/r

= $32,000/0.072

= $444,444.44

Hence the amount of money that will be paid for the policy is $444,444.44

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Human capital is one of the most important (according to some economists the most important) aspect for economic growth. If college graduates in Indiana go from 25% to 30%, it means that Indiana's human capital has improved.

With improved Human Capital, now Indiana can produce better steel and corn, or even produce other things, because its college graduates have acquire the necessary knowledge to do so. This will in turn lead to economic growth and a higher standard of living.

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As distances between buyers and sellers increase, problems related to operations performance increase. What are the primary resu
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As distances between buyers and sellers increase, problems related to operations performance increase.

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Learn more about sellers here:brainly.com/question/906651

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