Question
In: Finance
And insurance agent is trying to sell you an immediate retirement annuity, which for a single...
And
insurance agent is trying to sell you an immediate retirement
annuity, which for a single amount paid today will provide you with
$8000 at the end of each year for the next 15 years, you currently
earning 9% on low risk investments comparable to the retirement
annuity ignore taxes what is the most you would pay for this
annuity?
Solutions
Expert Solution
To Answer this question we need to apply time value of money to Annuity.
An annuity is a stream of equal periodic cash flows, over a specified time period. These cash flows are usually annual but can occur at other intervals, such as monthly or quarterly.
The future value of the ordinary annuity is calculated as shown below using Excel spreadsheet.
jeff jeffy answered 2 years agoRelated Solutions
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please show in excel
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Choice 4.44% 4.81% 4.00% 5.49% 4.72%
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An insurance agent is trying to sell you an annuity, that will provide you with $19,800 at the end of each year for the next 30 years.
Value of a retirement annuity Personal Finance
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