What will the yearly income

Reference no: EM131001996

The present values of a 10-year life annuity on (60), and a 10-year compound inter- est annuity, with annual payments of 1, are given, respectively by a 60(110) = 5 and a (110; v) = 6. A person age 60 has 100 000 that he plans to pay as a single premium for a life annuity, beginning at age 60. This will provide a level income of 12 500 per year for life. What will the yearly income be if, instead of a straight life annuity, he purchases a life annuity with a 10-year guaranteed period?

Reference no: EM131001996

Questions Cloud

Businesses maximize profits in perfectly competitive market : Explain how businesses maximize profits in a perfectly competitive market. Comment on the benefits to consumers in such as market.

Find a formula for the single premium : The first 10 payments will be paid regardless of whether the annuitant is alive or not. Find a formula for the single premium.

Classifications of current liabilities and long-term : Prepare a classified balance sheet in report form. For assets, use the classifications of current assets, plant and equipment, and other assets. For liabilities, use the classifications of current liabilities and long-term liabilities.

Identify a process internal to the company : Create a high-level AS IS process flow chart using an appropriate tool.

What will the yearly income : What will the yearly income be if, instead of a straight life annuity, he purchases a life annuity with a 10-year guaranteed period?

Classified balance sheet in report form : Prepare a classified balance sheet in report form.

Demand side fiscal policy and supply side fiscal policy : Explain the differences between typical demand side fiscal policy and supply side fiscal policy. For each of the following fiscal policy proposals, determine whether the primary focus is on aggregate demand or aggregate supply or both.

What is the new present value of the contract : Suppose that the value of p81 increases by 10% while all other mortality rates remain unchanged. What is the new present value of the contract?

Government in managing the business cycle : What would happen if no one tried to manage the business cycle? What role do you see for the Executive Branch of the U.S. government in managing the business cycle? How does Fiscal Policy work? What are its limitations?

User Account

All Pages