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Present value of the annuity payments equals

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Suppose you set aside $1 million for an immediate annuity (i.e., you give $1 million now to an insurance company) with the following terms: you will get monthly income starting from next month, the monthly income is $4,000 paid at the end of each month until death. Suppose your expected annual return (APR) is 3% (with monthly compounding). How many years will you need to live to break even (i.e., the number of years so the present value of the annuity payments equals $1 million)?

Reference no: EM132465420

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