Question

Live Forever Life Insurance Co. is selling a perpetuity contract that pays $1,500 monthly. The contract currently sells for $115,000. What is the monthly return on this investment vehicle

Answer 1

1.3%

Step-by-step explanation:

To find the monthly return , the formula is =

Interest payment/ present value

$15,000 / $115,000 = 0.013043 = 1.3%

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