Liz Truss stepped down as prime minister of the United Kingdom after 45 days. She

is now eligible to collect 115,000 yearly. Suppose payments start one year from now

and that the effective annual interest rate is 6%.

(a) If she lives another 20 years, what is the present value of her pension?

(b) If she lives another 40 years, what is the present value of her pension?

(c) Comparing 2 times your answer in part a to your answer in part b, which is

greater? Give an intuitive explanation for why that is the case.