Gavin's grandfather, Mr. Jones, has just turned 90 years old and is applying for a lifetime annuity
Question:
Gavin's grandfather, Mr. Jones, has just turned 90 years old and is applying for a lifetime annuity that will pay $\$ 10,000$ per year, starting 1 year from now, until he dies. He asks Gavin to analyze it for him. Gavin finds that according to statistical summaries, the chance (probability) that Mr. Jones will die at any particular age is as follows:
Then Gavin (and you) answer the following questions:
(a) What is the life expectancy of Mr. Jones?
(b) What is the present value of an annuity at $8 %$ interest that has a lifetime equal to Mr. Jones's life expectancy? (For an annuity of a nonintegral number of years, use an averaging method.)
(c) What is the expected present value of the annuity?
Fantastic news! We've Found the answer you've been seeking!
Step by Step Answer:
Answered By
Ali Khawaja
my expertise are as follows: financial accounting : - journal entries - financial statements including balance sheet, profit & loss account, cash flow statement & statement of changes in equity -consolidated statement of financial position. -ratio analysis -depreciation methods -accounting concepts -understanding and application of all international financial reporting standards (ifrs) -international accounting standards (ias) -etc business analysis : -business strategy -strategic choices -business processes -e-business -e-marketing -project management -finance -hrm financial management : -project appraisal -capital budgeting -net present value (npv) -internal rate of return (irr) -net present value(npv) -payback period -strategic position -strategic choices -information technology -project management -finance -human resource management auditing: -internal audit -external audit -substantive procedures -analytic procedures -designing and assessment of internal controls -developing the flow charts & data flow diagrams -audit reports -engagement letter -materiality economics: -micro -macro -game theory -econometric -mathematical application in economics -empirical macroeconomics -international trade -international political economy -monetary theory and policy -public economics ,business law, and all regarding commerce
1+ Reviews
10+ Question Solved
Related Book For 
Question Posted:
