A retiree is offered the choice of two continuous annuities: − A life annuity, paying 30,000 per year. − A life annuity with a 5-year certain period, i.e., an annuity paying benefits for life, but with a minimum pay-out period of 5 years. The benefit amount for the second annuity is chosen so that the expected present value of the two annuities is the same. Given ? = 0.02 and ? = 0.07, determine the annual benefit amount of the second annuity, ??
A retiree is offered the choice of two continuous annuities: − A life annuity, paying 30,000 per year. − A life annuity with a 5-year certain period, i.e., an annuity paying benefits for life, but with a minimum pay-out period of 5 years. The benefit amount for the second annuity is chosen so that the expected present value of the two annuities is the same. Given ? = 0.02 and ? = 0.07, determine the annual benefit amount of the second annuity, ??
MATLAB: An Introduction with Applications
6th Edition
ISBN:9781119256830
Author:Amos Gilat
Publisher:Amos Gilat
Chapter1: Starting With Matlab
Section: Chapter Questions
Problem 1P
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A retiree is offered the choice of two continuous annuities:
− A life annuity, paying 30,000 per year.
− A life annuity with a 5-year certain period, i.e., an annuity paying benefits for life,
but with a minimum pay-out period of 5 years.
The benefit amount for the second annuity is chosen so that the expected present value
of the two annuities is the same. Given ? = 0.02 and ? = 0.07, determine the annual
benefit amount of the second annuity, ??
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