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A beneficiary receives a $10,000 life insurance benefit. If the beneficiary uses the proceeds to buy a 10-year annuity-immediate, the annual payout will be $1,538.

A beneficiary receives a $10,000 life insurance benefit. If the beneficiary uses the proceeds to buy a 10-year annuity-immediate, the annual payout will be $1,538. If a 26 year annuity-immediate is purchased, the annual payment will be $1,072. Both calculations are based on an annual effective interest rate of i. Find i. To be computed by hand, not in excel.

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