Math Problem Statement
We Pay Insurance Company will pay you $1,125 each quarter for 25 years. You want to earn a minimum interest rate of .86 percent per quarter. What is the most you are willing to pay today for these payments?
Multiple Choice
$72,746.05
$177,185.86
$75,254.54
$71,491.81
$74,776.72
Solution
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Math Problem Analysis
Mathematical Concepts
Annuities
Present Value
Interest Rates
Formulas
Present value of an annuity formula: PV = P × (1 - (1 + r)^-n) / r
Theorems
Time Value of Money
Suitable Grade Level
Grades 11-12, College Level
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