What is the maximum price an investor should be willing to pay (today) for a 10 year annuity that will generate $500 per quarter (such payments to be made at the end of each quarter), given he wants to earn 12 percent, compounded quarterly?( )
Using a financial calculator: N=10×4=40; I/Y=12/4=3; PMT=-500; FV=0; CPT PV=11557.