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Determine the amount of each annual payment

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Barclay is now 73 years old and is expected to live another 4 years. He has purchased a $150,000 variable annuity. The insurance company sets an Assumed Investment Return (AIR) of 5% per year. Funds are invested in the S&P/TSX Assume that over the course of the next 4 years, the returns on the S&P/TSX are as follows: Year 1: -6%, Yr 2: 8%, Yr 3: -12%, Yr 4: 22%

Determine the amount of each annual payment that Barclay will receive.

How much will the insurance company use to fund Barclay's benefits?

Reference no: EM132410966

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