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A series of equal payments occurring at equal interval of time, known as. Ans: ____________ A type of annuity where the first payment is made at the end of the first period. Ans: ___________________ A type of annuity whose sum is infinite. Ans: _____________ A type of annuity where the first payment is made at the beginning of the first period. Ans: ______________ A type of annuity where the first payment is made later after the end of the first period. Ans: ___________________

A series of equal periodic payments in which the first payment is made one compounding period after the date of the contract is ________. Group of answer choices a deferred annuity a compound annuity an ordinary annuity an annuity due

Which one of the following statements regarding annuities is NOT true? OA) A joint and full survivor annuity guarantees a level payment as long as either annuitant is alive OB) A single-premium variable deferred annuity generally permits additions to the invested amount once each year C) A flexible premium variable annuity generally limits changes in the investment mixto some extent. D) A life annuity with ten years certain and continuous will pay benefits for at least ten years if the annuitant dies six years after the initial distribution is made

Who is the person who will receive lifetime payments from an annuity? OA) Administrator O B) Decedent OC) Executor OD) Annuitant

refers to receiving a set monthly payment for the rest of your life. O Certain Period Annuity O Single Life Annuity O Joint & Survivor Annuity O Lump-sum Annuity

A death benefit on a life insurance policy can be paid in one of the following three ways: (i) A perpetuity of $250 at the end of each month (ii) $795.70 at the end of each month for n years (iii) One payment of $81,007 at the end of n years If each payment method produces the same present value for the death benefit, what is the present value of the death benefit? A. 48,300 B. 55,600 C. 61,900 D. 69,200 E. 78,500

An annuity that is established with a lump sum for the purpose of providing the investor with regular payments for the rest of the​ investor's life is called​ a(n) blank annuity. immediate  delayed

Which is NOT an essential element of an ordinary annuity?   Select the correct response:   The payments are made at equal interval of time.   The amounts of all payments are equal.   The first payment is made at the beginning of the first period.   Compound interest is paid on all amounts in the annuity.

Morris Dell owns a variable annuity contract that contains a guaranteed lifetime withdrawal benefit (GLWB). This benefit guarantees that a specified portion of Mr. Dell's annuity will be invested in a fixed account rather than in subaccounts O that Mr. Dell can receive a minimum annuity payment amount annually based on the annuitization of the contract's benefit base Othat Mr. Dell can take annual withdrawals of a specified percentage of a protected value for life without annuitizing the contract O that the annuity contract's death benefit will be equal to the greater of either (a) the premiums paid, less any withdrawals or (b) the contract's accumulated value

An [Select] is a sequence of equal period payments. If payments are made at the end of each time interval, the annuity is called an [Select]

When taxpayers receive distributions from qualified retirement plans, how much time is allowed to roll over the amount received into a new plan to avoid paying taxes on the distribution in the current year, assuming there are no unusual events? a. 60 days b. 90 days c. 180 days d. 1 year e. There is no time limit

Limited payment whole life insurance is a contract written for a given number of years after which the face value is automatically paid to the insured. True, False

Which of the following are characteristics of a perpetuity? Check all that apply. The present value of a perpetuity is calculated by dividing the amount of the payment by the investor’s opportunity interest rate. The principal amount of a perpetuity is repaid as a lump-sum amount. A perpetuity continues for a fixed time period. A perpetuity is a series of regularly timed, equal cash flows that is assumed to continue indefinitely into the future.       Your grandfather wants to establish a scholarship in his father’s name at a local university and has stipulated that you will administer it. As you’ve committed to fund a $15,000 scholarship every year beginning one year from tomorrow, you’ll want to set aside the money for the scholarship immediately. At tomorrow’s meeting with your grandfather and the bank’s representative, you will need to deposit ___________ (rounded to the nearest whole dollar) so that you can fund the scholarship forever, assuming that the account will earn…

(i) The present value of the perpetuity. (ii) The Macaulay duration of the perpetuity.

6. Perpetuities Perpetuities are also called annuities with an extended or unlimited life. Based on your understanding of perpetuities, answer the following questions. Which of the following are characteristics of a perpetuity? Check all that apply. A perpetuity is a stream of unequal cash flows.   The current value of a perpetuity is based more on the discounted value of its nearer (in time) cash flows and less by the discounted value of its more distant (in the future) cash flows.   A perpetuity is a stream of regularly timed, equal cash flows that continues forever.   The value of a perpetuity cannot be determined.     A local bank’s advertising reads: “Give us $45,000 today, and we’ll pay you $800 every year forever.” If you plan to live forever, what annual interest rate will you earn on your deposit? 1.42%   2.85%   2.49%   1.78%     Oops! When you went in to make your deposit, the bank representative said the amount of…

Perpetuities are also called annuities with an extended or unlimited life. Based on your understanding of perpetuities, answer the following questions. Which of the following are characteristics of a perpetuity? Check all that apply. The present value of a perpetuity is calculated by dividing the amount of the payment by the investor’s opportunity interest rate.   In a perpetuity, returns—in the form of a series of identical cash flows—are earned.   A perpetuity continues for a fixed time period.   The principal amount of a perpetuity is repaid as a lump-sum amount.     Your grandfather wants to establish a scholarship in his father’s name at a local university and has stipulated that you will administer it. As you’ve committed to fund a $5,000 scholarship every year beginning one year from tomorrow, you’ll want to set aside the money for the scholarship immediately. At tomorrow’s meeting with your grandfather and the bank’s representative, you will need to…

9. Perpetuities Perpetuities are also called annuities with an extended, or unlimited, life.   1. Based on your understanding of perpetuities, answer the following questions: Which of the following are characteristics of a perpetuity? Check all that apply. A perpetuity continues for a fixed time period.   In a perpetuity, returns—in the form of a series of identical cash flows—are earned.   The principal amount of a perpetuity is repaid as a lump-sum amount.   A perpetuity is a series of regularly timed, equal cash flows that is assumed to continue indefinitely into the future.   2. A local bank’s advertising reads: “Give us $35,000 today, and we’ll pay you $2,400 every year forever.” If you plan to live forever, what annual interest rate will you earn on your deposit? 5.49%   6.86%   9.60%   8.23%   3. Oops! When you went in to make your deposit, the bank representative said the amount of required deposit reported in the advertisement was incorrect and…

question 5

1.PLEASE, PERFORM THE EXERCISE IN EXCEL AND SHOW THE FORMULASA person substitutes a total insurance policy of $300,000.00 for an annuity, with the condition that it will be paid to him or his heirs for 25 years. If the insurance company operates at 7¼% interest, find the value of the annuity, the amount of total interest, and the effective rate. Note:In the image, this is the original exercise, it is in Spanish, but it is easy to understand. Very important Note:It is necessary that you make a solution approach and then the result. Above all, to check the procedure and/or the formulas used, especially when you use excel.

Mr. Bearer may choose to take a lump-sum payment of $25,292.8 now from his insurance policy or an annuity of $3,200 annually as long as he lives. How long must Mr. Bearer anticipate living for the annuity to be indifferent to the lump sum if interest rate is 8%? a. 13 years  b.15 years  c. 11 years  d. 9 years

9. Implied interest rate and period Consider the case of the following annuities, and the need to compute either their expected rate of return or duration. Joshua inherited an annuity worth $6,830.77 from his uncle. The annuity will pay him eight equal payments of $1,100 at the end of each year. The annuity fund is offering a return of Joshua's friend, willie, has hired a financial planner for advice on retirement. Considering Willie's current expenses and expected future lifestyle changes, the financial planner has stated that once Willie crosses a threshold of $1,387,311 in savings, he will have enough money for retirement. Willie has nothing saved for his retirement yet, so he plans to start depositing $25,000 in a retirement fund at a fixed rate of 6.00% at the end of each year. It will take v for Willie to reach his retirement goal.

A perpetuity of $1 each year, with the first payment due immediately, has a present value of $25 at an annual effective rate of i%. The owner exchanges it for another perpetuity with the first payment due immediately and subsequent payments due at two year intervals. What should the payment of the second perpetuity be, in order to keep the same interest rate, i%, and the same present value? A B с D E Less than $1.90 At least $1.90, but less than $1.94 At least $1.94, but less than $1.98 At least $1.98, but less than $2.02 $2.02 or more

When taxpayer receive distribution from qualified retirement plans, how many time is allowed to roll over the amount received into a new plan to avoid paying taxes on the distribution in the current year, assuming there are no unusual events? 60 days 1 year 180 days d       90 day There is no time limit