A 60 year old woman can purchase either of the following annuities from a life insurance company for $50,000 A 30 year term annuity will pay $367 at the end of each month A life annuity will pay $405 at the end of every month until the death of the annuitant To what age must the woman survive for t...

The economic value at age 60 of each annuity is the present value of the payments discounted at ...

A 60-year-old woman can purchase either of the following annuities from a life insurance company for $50,000.

Question:

A 60-year-old woman can purchase either of the following annuities from a life insurance company for $50,000. A 30-year term will pay $367 at the end of each month. A life will pay $405 at the end of every month until the death of the annuitant. To what age must the woman survive for the life to have the greater economic value? Assume that money can earn 8% compounded monthly.
Annuity
An annuity is a series of equal payment made at equal intervals during a period of time. In other words annuity is a contract between insurer and insurance company in which insurer make a lump-sum payment or a series of payment and, in return,...