Assume That You Own an Annuity That Will Pay You

Multiple Choice

Assume that you own an annuity that will pay you $15,000 per year for 12 years,with the first payment being made today.You need money today to start a new business,and your uncle offers to give you $156,000 for the annuity.If you sell it,what rate of return would your uncle earn on his investment?

A) 3.31%
B) 2.77%
C) 2.42%
D) 2.72%
E) 2.15%