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Your aunt is about to retire, and she wants to buy an annuity that will supplement her income by $65,000 per year for 25 years, beginning a year from today. The going rate on such annuities is 6.25%. How
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Your aunt is about to retire, and she wants to buy an annuity that will supplement her income by $65,000 per year for 25 years, beginning a year from today. The going rate on such annuities is 6.25%. How much would it cost her to buy such an annuity today

User Brendan Wood
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1 Answer

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$811,540.16 would it cost her to buy such an annuity today

Solution:

Given

Annuity that would increase the profits by $65,000 a year over 25 years

The existing premium on these annuities is 6.25 a cent.

N 25

I/YR 6.25%

PMT $65,000

FV $0.00

PV $811,540.16

User Greg R
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5.8k points
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