Choose the Recipient of the Largest Dollar Amount of Annual

question 19

Multiple Choice

Choose the recipient of the largest dollar amount of annual annuity receipts for a $100,000 single-premium immediate annuity:

• A) male age 65
• B) female age 65
• C) male age 25
• D) female age 20

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Definitions:

Nominal Rate

The stated interest rate of a loan or investment, before adjusting for compounding or inflation.

Compounded Quarterly

Interest calculation method where interest is added to the principal sum at the end of every quarter, thus earning interest on interest.

Compounded Nominal

Refers to the calculation of interest added to the principal amount of a deposit or loan based on both the initial principal and the accumulated interest from previous periods.

Triple

To increase or become three times as much in size, number, or amount.