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An insurance agent is selling you an immediate-retirement annuity package, which for a single premium amount paid today will provide you with R18 000 at

An insurance agent is selling you an immediate-retirement annuity package, which for a single premium amount paid today will provide you with R18 000 at the end of each year for the next 20 years. You currently earn 10% on low-risk investments comparable to the retirement annuity. Calculate the most you would pay today.

1. R2 675.59

2. R121 095.00

3. R153 244.15

4. R396 000.00

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