Your Aunt Is About to Retire,and She Wants to Buy

question 93

Multiple Choice

Your aunt is about to retire,and she wants to buy an annuity that will provide her with $65,000 of income a year for 25 years,with the first payment coming immediately.The going rate on such annuities is 6.25%.How much would it cost her to buy the annuity today?

• A)$739,281.38
• B)$778,190.93
• C)$819,148.35
• D)$862,261.42

---

Definitions:

Accretionary Prism

A wedge-shaped mass of sediment and rock scraped off the top of a downgoing tectonic plate at a convergent plate boundary, often leading to the formation of new land.

Volcanic Mountain Belt

A region typically found at convergent plate boundaries, characterized by a series of volcanoes formed from the melting of subducted lithosphere.

Crustal Extension

The process by which the Earth's crust is stretched and thinned, often associated with the formation of rift valleys and basins.

Mesozoic

An era of geological time from about 252 to 66 million years ago, known for the rise of dinosaurs and significant volcanic activity.