The Portion of the Principal and Interest of an Annuity

question 127

Multiple Choice

The portion of the principal and interest of an annuity that has not been paid to the annuitant prior to death is the ____ benefit.

• A)principal
• B)distribution
• C)survivorship
• D)installment
• E)accumulated

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Definitions:

Discounted

Reduced in price or reflecting the present value of future cash flows when taking into account the time value of money.

Present Value

The value today of a future amount of money or series of payments, adjusted for a specific return rate.

Discounted

The process of determining the present value of a payment or stream of payments that will be received in the future.

Present Value

The current value of a future amount of money or stream of cash flows, given a specified rate of return.