You Start an Annuity with $1million and Expect to Receive

question 79

Multiple Choice

You start an annuity with $1million and expect to receive 12 equal payments beginning at the end of the first year.The guaranteed annual interest rate is 6 percent.The annual payments that you expect to collect are

• A)$88,333.33.
• B)$119,277.03.
• C)$59,638.51.
• D)$56,262.75.
• E)$112,525.50.

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Definitions:

Parol Evidence

Parol Evidence refers to verbal or extrinsic information that is not included in the written contract, which parties may attempt to introduce to interpret, modify, or supplement the contract terms.

Integrated Written Contract

A contract that is contained completely within a single written document, representing the full agreement between the parties, and superseding any previous agreements or negotiations.

Notarized

The act of officially certifying a legal document by a notary public, confirming the authenticity of signatures or documents.

Part Performance Exception

A legal doctrine that allows for the enforcement of an oral contract when one party has taken significant actions in reliance on the contract.