. What is an "annuity"? How much would you expect to pay for a 20 year annuity that makes annual payments of $1000, if the interest rate is expected to average 3.5% over that period? How much would you expect to pay for a 20 year, $10,000 (face value) coupon bond that makes annual coupon payments of $1000 if the interest rate is expected to average 3.5% over that period?