Your grandmother bought an annuity from Great-West Life Insurance Company for $361,220 when she retired. In exchange for the $361,220, Great-West will pay her $30,000 per year until she diesThe interest rate is 6%. How long must she live after the day she retired to come out ahead (that is, to get more in value than what she paid in?-CHEDShe must live at least years. (Round up to the nearest whole year.)

Here,Amount Invested is $361,220Annuity Amount is $30,000Interest Rate is 6%

Answered: Your grandmother bought an annuity from…

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

See similar textbooks

Similar questions

You annually invest $2,000 in an individual retirement account (IRA) starting at the age of 30 and make the contributions for 15 years. Your twin sister does the same starting at age 35 and makes the contributions for 25 years. Both of you earn 7 percent annually on your investment. What amounts will you and your sister have at age 60? Use Appendix A and Appendix C to answer the question. Round your answers to the nearest dollar.Amount on your account: $ Amount on your sister's account: $ Who has the larger amount at age 60?-Select-You haveYour sister hasItem 3 the larger amount.
Ms. Anna Ang, aged 39, recently purchased an endowment plan from an insurer that requires her to set aside $24,000 per year for the next 23 years till she retires at age 62. The first premium payment occurs at the beginning of the period. Assuming an inflation rate of 2% and an estimated rate of return of 4.0% from the endowment plan, what is the estimated future value of Anna’s regular savings at age 62?
Amy purchases an annuity that will give her payments of R at the end of each quarter for seven years. She will receive the first of these payments in 1.5 years. If Amy paid $50,000 for this annuity and will earn a nominal rate of interest of 6% compounded quarterly,(a) write the equation of value (using the appropriate actuarial notation) for this annuity at the time of purchase. Be sure to indicate the effective rate per payment period being used.(b) find the value of R.
Mary is going to receive a 31-year annuity of $8,600 per year. Nancy is going to receive a perpetuity of $8,600 per year. If the appropriate interest rate is 9 percent, how much more is Nancy’s cash flow worth?
Hayley has received an inheritance. She would like to set aside funds today that will allow her to embark on a year-long trip that will start in exactly 3 years from now. While on that trip, Hayley estimates she will need to withdraw 12 monthly payments of $4,000, with the first payment received at the start of her travels in 3 years from today. If her funds will earn 3.6% compounded monthly for the entire time, how much does Hayley need to invest today in order to finance her trip?
Kourtney and Khloe Kardashian are receiving slightly different incomes from investments that they had made in the past. Kourtney will receive a perpetuity of $29,000 per year forever, while Khloe will receive the same annual payment for the next 50 years. If the interest rate is 7.3 percent, how much more are Kourtney's payments worth now?
At the time of her grandson's birth, a grandmother deposits $12,000 in an account that pays 3.5% compounded monthly. What will be the value of the account at the child's twenty-first birthday, assuming that no other deposits or withdrawals are made during this period? The value of the account will be $ (Round to the nearest dollar as needed.)
The AGI of the Newtons, a married couple, is $199,000 this year. They would like to contribute to a Roth IRA. a. What is the maximum amount this couple can contribute to a Roth IRA? b. Now Supposed that the Newtons will report AGI of less than $196,000 and put $12,000 each year into their Roth IRA for 20 years, earning an annual return of 5%. What future value will accumulate in their Roth at the end of this period?
At the time of her grandson's birth, a grandmother deposits $4000 in an account that pays 4.5% compounded monthly. What will be the value of the account at the child's twenty-first birthday, assuming that no other deposits or withdrawals are made during this period? The value of the account will be $ (Round to the nearest dollar as needed.)
You are the beneficiary of a life insurance policy. The insurance company informs you that you have two options for receiving the insurance proceeds. You can receive a lump sum of $400,000 today or receive payments of $16,000 a year for 15 years. You can earn 6 percent on your money. Which option should you take and why?
Hank made payments of $205 per month at the end of each month for 30 years to purchase a piece of property. He promptly sold it for $175,751. What annual interest rate would he need to earn on an ordinary annuity for a comparable rate of return? (Answer should be a percentage rounded to the nearest hundredth as needed)
Jenelle bought a home for $370,000, paying 18% as a down payment, and financing the rest at 4.6% interest for 30 years. Round your answers to the nearest cent. How much money did Jenelle pay as a down payment? $ What was the original amount financed? $ What is her monthly payment? $ If Jenelle makes these payments every month for thirty years, determine the total amount of money she will spend on this home. Include the down payment in your answer. $

SEE MORE QUESTIONS

Recommended textbooks for you

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Foundations Of Finance

Finance

ISBN:

9780134897264

Author:

KEOWN, Arthur J., Martin, John D., PETTY, J. William

Publisher:

Pearson,

Fundamentals of Financial Management (MindTap Cou…

Finance

ISBN:

9781337395250

Author:

Eugene F. Brigham, Joel F. Houston

Publisher:

Cengage Learning

Corporate Finance (The Mcgraw-hill/Irwin Series i…

Finance

ISBN:

9780077861759

Author:

Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor

Publisher:

McGraw-Hill Education

SEE MORE TEXTBOOKS