$\backslash$table$[[$Q$4,],[$EPV of Payment to Mrs Lin,$$1,467,771\mathrm{.}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 Q$4)($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 B$20($as an Excel calculation$),$ and

explain your calculations in your report.