When calculating the the annuity, why is in the denominator ".002466 (1+.002466)^839. Why is it to the power of 839 and not 840?

3. Congratulations! You've won the 2008 NESTL Salary for Your Entire Life" raffle, representing 1,520 per month for the rest of your life. Assume it's 01/11/2008 and that you will be paid the first of every month (beginning today). You don't need to worry about tax- related issues. Just bear in mind that banks are offering deposits with 3% AER. a) Suppose your children, grandchildren, etc., could inherit this annuity. Suppose also that you would like to negotiate with NESTL to receive a single lump-sum payment on 01/11/2008, instead of the monthly payments forever. How much would NESTL be willing to pay you? b) How much would NESTL be willing to pay you if this lifelong income were in your name only (as is the case, in fact) and non-transferrable to anyone else? Because you're so athletic, NESTL has calculated that you have another 70 years ahead of you (until 31/10/2078). O ier eingeben PI 01 Financial Economics Santiago Forte ESADE N = 70.12 = 840 As of 01/11/2008, the value of those 840 monthly instalments of 1,520 each (the first of which is payable on that same 01/11/2008), will be: V01.11.08 =C (1 + 112)" - 1 12. (1+112) (1 +112) = 1,520 (1.0025) 840 1 0.0025. (1.0025)839 539,804.41 Consequently, that would be the single lump-sum payment that NESTL would be willing to make on 01/11/2008. BASES SORTEO PROMOCIN "UN SUELDO PARA TODA LA VIDA" 2008 No O 82