You Have a Chance to Buy an Annuity That Pays

question 110

Multiple Choice

You have a chance to buy an annuity that pays $16,000 at the beginning of each year for 5 years.You could earn 4.5% on your money in other investments with equal risk.What is the most you should pay for the annuity?

• A) $73,400.41
• B) $82,208.46
• C) $86,612.49
• D) $64,592.36
• E) $81,474.46

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Definitions:

Termination

The process of ending employment or concluding an engagement or agreement.

Discriminatory Firings

The act of terminating employees' contracts based on biased, unfair reasons, such as age, gender, race, or religion.

Deadweight Loss

A reduction in economic effectiveness that happens when it's impossible to reach or the equilibrium result is not attained.

Demand Curve

A graph showing the relationship between the price of a good and the amount of that good consumers are willing to buy.