Assume that at retirement you have accumulated $500,000 in a variable annuity contract. The assumed investment return is 6% and your life expectancy is 15 years. What is the hypothetical constant benefit payment?
|E. cannot tell without additional information.|
Annuity refers to a series of payment with an equivalent amount at an equal interval period over a range period. An annuity is commonly used to compute the monthly home mortgage payment, regular deposit to achieve the future target value of an investment, and monthly payment of a cash loan.
Answer and Explanation: 1
In this problem, we need can compute the constant benefit payment of the fund value using the formula below:
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fromChapter 2 / Lesson 7
Learn about annuities. Understand what an annuity is, examine the annuity formula and learn how to calculate its future value, and see examples of annuities.