A pension plan member is entitled to a benefit of $1,000 per month, in advance, for life commencing at age 65. The plan member can also opt for a smaller benefit, but it will be on a certain life annuity with a 10-year guarantee. An actuary calculates that the benefit of both products is equal if the actuarial present value is calculated for age 65. Calculate the benefit that will be paid for the life and certain annuity with an interest rate of 5% per annum. certain annuity

It is suggested that the benefit be stated as follows

12 000(32) * 12 B(12) 65:10 12 000(32) * 12 B(12) 65:10