How Much Will It Cost Shaun to Purchase a Two-Level

question 2

Multiple Choice

How much will it cost Shaun to purchase a two-level retirement annuity that will pay $6000 at the end of each month for the first 10 years, and $9000 per month for the next 15 years? The payments represent a rate of return to Shaun of 6% compounded monthly.

• A) $1 066 532
• B) $586 201
• C) $540 441
• D) $1 126 642
• E) $2 193 174

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Definitions:

Short-term Profits

Profits earned within a short time frame, typically within a year, emphasizing immediate financial performance over long-term sustainability.

Scenario Analysis

A process of analyzing possible future events by considering alternative possible outcomes.

Future Outcome

An event or result that occurs later in time, often as a consequence of actions taken in the present.

Forecasts

Predictions about future events, conditions, or trends based on current data or analysis, used to assist in planning and decision-making.