Silva Is Contemplating to Buy a 20 Year Annuity Paying

question 10

Multiple Choice

Silva is contemplating to buy a 20 year annuity paying $2500 at the end of each month. What amount will be required to purchase the annuity, if the annuity provides a return of 6.75% compounded annually?

• A) $334 000
• B) $47 246
• C) $600 000
• D) $37 037
• E) $567 436

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Definitions:

Procedural Memory

A type of long-term memory involved in the acquisition of skills and tasks that can be performed without conscious recall.

Episodic Memory

A subtype of long-term memory that involves the recollection of specific events, situations, and experiences.

Implicit Memory

Memory that influences our behavior without our conscious recognition, involving learned skills and conditioned behaviors.

Explicit Memory

Refers to the conscious, intentional recollection of factual information, previous experiences, and concepts.