Question
Richard is nearingretirement.Hewillbe 65 next year. He will like to purchasean annuity that will pay over his lifetime (average life expectancy in Canada for males
Richard is nearingretirement.Hewillbe 65 next year. He will like to purchasean annuity that will pay over his lifetime (average life expectancy in Canada for males is 81 years) a fixedincome. If he deposits $100,000 at age 65 with an insurance company they have promised to pay a MONTHLYANNUITY at the effective annual rate (EAR) of 7% per year.The average life expectancy that the insurance company uses for an individual at age 65is 20years.How much will be his monthly annuity?
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Contemporary Financial Management
Authors: R. Charles Moyer, James R. McGuigan, Ramesh P. Rao
13th edition
1285198840, 978-1285198842
