Emerson Cammack wishes to purchase an annuity contract that will pay him $7, year for the rest of his life. The Philo Life Insurance Company figures that his life expectancy is 20 years, based on its actuary tables. The company imputes a c annual interest rate of 6 percent in its annuity contracts. How much will Cammack have to pay for the annuity? 2. 000 a ompound a. ow much would he have to pay if the interest rate were 8 percent? 3. You borrow $10,000 at 14 percent compound annual interest for four years. The loan is repayable in four equal annual installments payable at the end of each year a. What is the annual payment that will completely amortize the loan over four years? (You may wish to round to the nearest dollar.) b. Of each equal payment, what is the amount of interest? The amount of loan principal? (Hint: In early years, the payment is composed largely of interest, whereas at the end it is mainly principal.)