A financial services company offers to pay you $1,000 a year for life in exchange for $20,000 today. What factors affect your decision to take this offer?
What will be an ideal response?
This policy has an internal rate of return of 1/20 = 5%. If the interest rate exceeds 5%, then there are better investments elsewhere. If the interest rate is less than 5%, this is a good deal.
Economics
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The largest category of state and local government expenditures is
A) public welfare. B) highways. C) education. D) interest on their debt. E) Social Security.
Economics
If the number of people unemployed is 100, the number of people employed is 1000, and the working-age population is 1400, then the employment-to-population ratio is
A) 78.6 percent. B) 75 percent. C) 71.4 percent. D) 66.6 percent.
Economics