A Deferred Annuity Will Pay You $500 at the End

question 149

Multiple Choice

A deferred annuity will pay you $500 at the end of each year for 10 years,however the first payment will not be made until three years from today (payments will be made at the end of years 3 through 12) .What amount will you have to deposit today to fund this deferred annuity? Use an 8% discount rate and round your answer to the nearest $100.

• A) $2,200
• B) $2,400
• C) $2,900
• D) $3,400

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Definitions:

Routinely Ignored

Describes something that is consistently overlooked or neglected, often due to habitual inattention.

Undermined

Weakened or damaged, typically in a gradual or subtle way.

Overpaid

Receiving compensation that exceeds the perceived value or market worth of one's work or role.

Work Stress

The adverse reaction people have to excessive pressures or other types of demand placed on them at work.