Your mother retired today and has the option of purchasing an annuity. If she exchanges $20,000 of her savings today for a 6.50 percent, 18-year annuity, what will her annual cash flow be? (Unless stated otherwise, always assume the first payment is received at the end of the period, not the start). NOTE: You are exchanging cash today for a series of cash flows. This is an annuity problem (chapter 6), where we the value of the annuity is defined at the START of all the cash flows, so use the present value of an annuity equation N PVA = C1-(1+r) . You already know what the annuity is worth today (PVA), the number of payments (t), as well as the discount rate (r). You only need to calculate C, the size of the cash flow