(FV annuity) Abner and Maude are both in their eighties. They’re thinking of selling their house for $500,000 and moving into an apartment complex for seniors. The senior complex will cost $50,000 per year, payable in full at the beginning of each year. This payment covers all of Abner and Maude’s costs

(food, rental, entertainment, and medical).

a. If they can earn 6% annually on the proceeds from their house and if they live for 10 more years, how much will they be able to leave to their children as an inheritance?

b. What is the longest they can live from the apartment proceeds before the money runs out?

c. Find the answers to parts a and b above assuming that the interest rate is 7%.