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NEW QUESTION: 1
If an investor who has a required rate of return of 7% per year pays $1,000 for a five-year ordinary annuity, the annuity pays ________ per year.
A. $256
B. $263
C. $271
D. $244
Answer: D
Explanation:
Explanation/Reference:
Explanation:
If the annuity pays C per year, we have 1,000 = C/0.07*(1-1/(1.07