How Much Will It Cost to Purchase a 20-Year Indexed

question 108

Short Answer

How much will it cost to purchase a 20-year indexed annuity in which the end-of-quarter payments start at $5,000 and grow by 2% compounded quarterly? Assume that the money used to purchase the annuity earns 6% compounded quarterly.

---

Definitions:

Over-Simplification

The process of reducing complex data or information into too simple a form, often missing critical details or nuances.

Masks Reality

Hides or disguises true nature, conditions, or situations, often making something appear different from what it really is.

Evaluative Role

The function of assessing or judging the value, quality, or importance of something based on established criteria.

Analysis

Identifies the intended and actual inferential relationships among statements, questions, concepts, descriptions, or other forms of representation intended to express belief, judgment, experiences, reasons, information, or opinions.