Your Uncle Is About to Retire,and He Wants to Buy

question 93

Multiple Choice

Your uncle is about to retire,and he wants to buy an annuity that will provide him with $75,000 of income a year for 20 years,with the first payment coming immediately.The going rate on such annuities is 5.25%.How much would it cost him to buy the annuity today?

• A)$ 825,835
• B)$ 869,300
• C)$ 915,052
• D)$ 963,213
• E)$1,011,374

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Definitions:

Dominant Strategy Equilibrium

A situation in game theory where each participant's best strategy remains constant regardless of what strategies others choose.

Optimal Choice

The best possible selection from a set of alternatives, given constraints and objectives.

Long-Run Equilibrium

A state in market conditions where all producers and consumers have fully adjusted to any changes in the market, with no excess supply or demand, and all firms are earning normal profit.

Attendance

The act of being present at a location or event, often monitored for purposes such as education, employment, or participation.