Assume That at Retirement You Have Accumulated $500,000 in a Variable

question 44

Multiple Choice

Assume that at retirement you have accumulated $500,000 in a variable annuity contract. The assumed investment return is 6%, and your life expectancy is 15 years. If the first year's actual investment return is 8%, what is the starting benefit payment?

• A) $30,000.00
• B) $33,333.33
• C) $51,481.38
• D) $52,452.73
• E) The answer cannot be determined from the information provided.

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Definitions:

Real GDP

Real GDP refers to the economic output of a country adjusted for price changes, such as inflation or deflation, providing a more accurate measure of economic performance over time.

Nominal Interest Rate

The proportionate rise in funds that the borrower repays to the lender, without considering inflation adjustments.

Money Demand

The desire to hold cash or easily liquidable assets instead of investing or consuming, influenced by interest rates and economic conditions.

Interest Rate

The proportion of a loan that is charged as interest to the borrower, typically expressed as an annual percentage of the loan outstanding.