a. Calculate the annual cash flows of a $1 million, 20-year fixed-payment annu- ity earning a guaranteed 10 percent per year if payments are to begin at the end of the current year.

b. Calculate the annual cash flows of a $1 million, 20-year fixed-payment annuity earning a guaranteed 10 percent per year if payments are to begin at the end of year5.

c. What is the amount of the annuity purchase required if you wish to receive a fixed payment of $200,000 for 20 years? Assume that the annuity will earn 10 percent per year.