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Are annuities good investments? To answer this question, consider the situation of John. He is 50 years old and can purchase a lifetime annuity for
Are annuities good investments? To answer this question, consider the situation of John. He is 50 years old and can purchase a lifetime annuity for $100,000. The annuity pays John $6,000 per year for the rest of his life. If John lives to be 83, what rate of return will he earn on this investment? What if John only lives to be 77? If John lives to age 83, his IRR is % per year. (Round to two decimal places.) If John lives to age 77, his IRR is % per year. (Round to two decimal places.)
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