Your Uncle Is About to Retire,and He Wants to Buy

question 93

Multiple Choice

Your 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:

Alternative Dispute Resolution

is a collective term for methods of resolving disputes outside the judicial process, such as arbitration or mediation.

Litigation

The process of taking legal action or resolving disputes in court; involves a plaintiff filing a lawsuit against a defendant to seek judgments or damages.

Speed and Cost

Considerations in decision-making, focusing on how quickly actions can be taken and the expenses involved.

Private Trial

An ADR method in which a referee is selected and paid by the disputing parties to offer a legally binding judgment in a dispute.