Uncle Is About to Retire, and He Wants to Buy

question 43

Multiple Choice

uncle is about to retire, and he wants to buy an annuity that will provide him with $75,000 of income a year for 20 years, with the first payment coming immediately.The going rate on such annuities is 5.25%.How much would it cost him to buy the annuity today?

• A)$825,835
• B)$869,300
• C)$915,052
• D)$963,213
• E)$1,011,374

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Definitions:

Proximity Switch

A device that detects the presence or absence of an object or material without physical contact, often used in industrial applications for automation.

Sound Waves

Mechanical vibrations that travel through a medium such as air, water, or solid materials, and can be heard when they reach a human or animal ear.

Pulses

Rapid, transient changes in the amplitude of an electrical signal, often used to convey information or trigger specific actions in electronic devices.