Question
Jill, age 39, can buy a deferred annuity that will pay $100 per month beginning at age $65 and will continue until her death for
Jill, age 39, can buy a deferred annuity that will pay $100 per month beginning at age $65 and will continue until her death for a single premium today of $1000. Jack, age 37, can buy a deferred annuity that will pay $100 per month beginning at age 65 and will continue until his death for a single premium today of $900. What can be said about the single premium that would be required of Jill and Jack for a joint and 100% survivor annuity that will pay $100 per month beginning at age 65?
A) the cost will be about $1900
B) the cost will be between $900 and $1000
C) the cost will exceed $1000
D) it is impossible to determine anything about the price of the joint annuity because the differing ages of the annuitants would require the use of a mortality table
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