What is the maximum amount an investor should be willing to pay for a two-year $200 annuity, if the best alternative investment earns 20 percent per annum?
A)$305.56
B)$166.67
C)$138.89
D)$268.79

Name: What is the maximum amount an investor should be willing to pay for a two-year $200 annuity, if the best alternative investment earns 20 percent per annum? A)$305.56 B)$166.67 C)$138.89 D)$268.79
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Question

Quizplus · Accepted Answer

The present value of a two-year $200 annuity at 20% is $305.56.

What Is the Maximum Amount an Investor Should Be Willing