A retirement plan guarantees to pay to you or your estate a fixed amount for 20 years.

Question:

A retirement plan guarantees to pay to you or your estate a fixed amount for 20 years. At the time of retirement you will have $73,425 to your credit in the plan. the plan anticipates earning 9% interest given the following information, how much will your annual benefits be?

Present value of $1 PVIF = .18

Future value of $1 FVIF = 5.6

Present value of annuity = 9.129

Future value of annuity = 51.16

a. $1,435

b. $13,070

c. $8,043

d. $13,102

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,...