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table [ [ Q 4 , ] , [ EPV of Payment to Mrs Lin,$ 1 , 4 6 7 , 7 7 1

\table[[Q4,],[EPV of Payment to Mrs Lin,$1,467,771.06]]
It occurs to Mrs Lin that, instead of "self-funding" her retirement, she could buy a
life annuity from an insurer. Consider such a life annuity, paying exactly what Mrs
Lin wants (C at the end of the first year, then 2% more each year thereafter).
For now, let's assume that an insurer charges exactly the EPV of the benefits,
under a 4% p.a. interest rate (so, the price of this annuity would correspond
exactly to the amount you computed in Q4)(attached image). Because this EPV is less than W, if
Mrs Lin buys this annuity, she will have some spare cash. Assume she uses all this
cash to buy a "Whole of Life" insurance policy. This policy will pay a benefit "B" to
Josephine, at the end of the year in which Mrs Lin passes. Again, let's assume the
premium (to be paid now), for this Whole of Life insurance policy is the EPV of the
benefit (still using a rate of 4% p.a.).
What is B? Please place your answer in cell B20(as an Excel calculation), and
explain your calculations in your report.
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