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

question 50

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:

Longevity

The length of time an individual lives, often used in the context of life span extension and quality of life.

Functional Age

Measure of a person’s ability to function effectively in his or her physical and social environment in comparison with others of the same chronological age.

Geriatrics

The branch of medicine focusing on the health, care, and diseases of older adults and the challenges associated with aging.

Gerontology

The study of the aging process, including the biological, psychological, and social aspects of aging.