Question
Your grandmother bought an annuity from Rock Solid Life Insurance Company for $450,000 when she retired. In exchange for the $450,000, Rock Solid will pay
Your grandmother bought an annuity from Rock Solid Life Insurance Company for $450,000
when she retired. In exchange for the $450,000,
Rock Solid will pay her $50,000
per year until she dies.
The interest rate is 4%.
How long must she live after the day she retired to come out ahead(that is, to get more in value than what she paidin)?
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Corporate Finance
Authors: Jonathan Berk and Peter DeMarzo
3rd edition
978-0132992473, 132992477, 978-0133097894
