Professor’s Annuity Corp. offers a lifetime annuity to retiring professors. For a payment of $81,000 at age 65, the firm will pay the retiring professor $625 a month until death.   a. If the professor’s remaining life expectancy is 15 years, what is the monthly interest rate on this annuity? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)           b. What is the effective annual interest rate? (Do not round intermediate calculations. Round your answer to 2 decimal places.)           c. If the monthly interest rate is 0.75%, what monthly annuity payment can the firm offer to the retiring professor? (Do not round intermediate calculations. Round your answer to 2 decimal places

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Amortized Loans

The term "amortization" refers to spreading the value of a loan or a debt over a series of regular payments or installments comprising of both the principal and interest amount. It generally involves the process where in the value of a loan or an intangible asset is written down over its maturity period.