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Question
Assume that you own an annuity that will pay you $15,000 per year for 12 years, with the first payment being made today. You need money today to open a new restaurant, and your uncle offers to give you $120,000 for the annuity. If you sell it, what rate of return would your uncle earn on his investment?a. 6.85%
b. 7.21%
c. 7.59%
d. 7.99%
e. 8.41%
Answer
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