Your Father Is Considering Purchasing an Annuity That Pays $5,000

question 147

Multiple Choice

Your father is considering purchasing an annuity that pays $5,000 at the beginning of each year for 5 years.He could earn 4.5% on his money in other investments with equal risk.What is the most he should pay for the annuity?

• A) 20,701
• B) $21,791
• C) $22,938
• D) $24,085
• E) $25,289

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Definitions:

Single Parents

Individuals who raise their children alone without the involvement or support of the other parent in the household.

Dual-career Couples

Partnerships where both individuals have significant jobs, often with similar levels of commitment and involvement.

Behaviourally Anchored Rating Scale (BARS)

A method used for appraising the performance of employees, involving specific examples of effective or ineffective job behaviors.

Performance Achievement

The process of meeting and exceeding set performance standards or goals within an organization.