The Australian Insurance Company offers you a 10-year annuity of $10 000 per year.The price to purchase the annuity is $70 250.The interest rate implicit in this transaction is approximately:

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The interest rate implicit in this transaction is approximately 7.00%. This can be calculated using the formula:Interest rate = (Annuity payment / Purchase price) x 100In this case, the annuity payment is $10,000, the purchase price is $70,250, and the interest rate is:Interest rate = (10,000 / 70,250) x 100 = 7.00%

The Australian Insurance Company Offers You a 10-Year Annuity of $10