Alfa Life Insurance Co is trying to sell you an investment t

Alfa Life Insurance Co. is trying to sell you an investment that will pay you and your heirs $10,000 per year forever. If the required return on this investment is 4.75 percent, how much will you pay for the policy?

Answer: Calculation of the amount that will you pay for the policy:

PV=$10000/0.0475=$210526.32