Curly’s Life Insurance Co. is trying to sell you an investment policy that will

Question

Curly’s Life Insurance Co. is trying to sell you an investment policy that will pay you and your heirs $29,000 per year forever. Assume the required return on this investment is 7.5 percent.

How much will you pay for the policy? (Enter rounded answer as directed, but do not use rounded numbers in intermediate calculations. Round your answer to 2 decimal places (e.g., 32.16).)

How much will you pay for the policy? (Enter rounded answer as directed, but do not use rounded numbers in intermediate calculations. Round your answer to 2 decimal places (e.g., 32.16).)

Explanation / Answer

Amount to be received per year                         29,000.00 Required return 7.50% Amount to be paid for the policy = 29000/7.5% Amount to be paid for the policy = $386,666.67

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