You Buy an Annuity Which Will Pay You $12,000 a Year

question 39

Multiple Choice

You buy an annuity which will pay you $12,000 a year for ten years. The payments are paid on the first day of each year. What is the value of this annuity today at a 7% discount rate?

• A) $84,282.98
• B) $87,138.04
• C) $90,182.79
• D) $96,191.91
• E) $116,916.21

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Definitions:

Grade 8

A classification referring to the strength and durability of bolts and fasteners, indicating high tensile strength.

UNC

A standardized thread design used for bolts, nuts, and screws, characterized by a unified coarse pitch.

Proof Load

A specific load value, often used in testing, that a component or assembly can bear without permanent deformation or failure.

Tensile Strength

A measure of the maximum amount of stress a material can withstand while being stretched or pulled before breaking.