An insurance annuity offers to pay you $1,000 per quarter for 20 years. If you want to earn a rate of return of 6.5 percent, compounded quarterly, what is the most you are willing to pay as a lump sum today to obtain this annuity

the amount that willing to pay is $44,591.11

Explanation:

The computation of the amount that willing to pay is as follows:

The Present Value of an Ordinary Annuity is

= Amount × [{1 - (1 ÷ (1 + rate of interest)^n} ÷ rate of interest]

= $1,000 × [{1 - (1 / (1 + 0.065 ÷ 4)^100} ÷ 0.065 ÷ 4]

= $44,591.11

Hence, the amount that willing to pay is $44,591.11

We simply applied the above formula so that the correct value could come

And, the same is to be considered

whole quiz

1. the sum of all activities involved in getting high-quality products into the marketplace

2.operations

3. the principle of looking at the supply chain as a whole in order to improve the overall flow through the system.

4. produced; performed

5. activities producing tangible products, such as radios, newspapers, buses, and textbooks.

6. activities producing intangible and tangible products, such as entertainment, transportation, and education.

7.   customer focus

8. analyzing a competitor's products to identify desirable improvements

9. the systematic direction and control of the processes that transform resources into finished projects that create value for and provide benefits to consumers.

10. operation management.

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