June, age 76, and Augustus, age 78, are married. They purchased a single life annuity contract that

Question:

June, age 76, and Augustus, age 78, are married. They purchased a single life annuity contract that will pay $1,500 per month for the life of June. The expected return on the contract:

a. Is $190,800.

b. Is $214,200.

c. Is $405,000.

d. Cannot be determined with the information given.

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,... Expected Return
The expected return is the profit or loss an investor anticipates on an investment that has known or anticipated rates of return (RoR). It is calculated by multiplying potential outcomes by the chances of them occurring and then totaling these...

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