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What will be their payment amount

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a) An elderly couple is considering purchasing an annuity to provide guaranteed income for their retirement. Their personal financial advisor offers to sell them an annuity that will pay $63,000 per year to cover their living expenses for the next 15 years. If they only expect a 5% return on their money, how much should they be willing to pay for this annuity investment?

b) An astute IWU MBA graduate is considering refinancing their student loans. A special rate of 3.46% is available. The graduate would make monthly payments for the next 10 years. If the student owes $25,000, what will be their payment amount?

Reference no: EM132763545

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