Final answer:
The student’s question involves calculating the annual payment from a life insurance fund after depositing $10,000 annually for 10 years, with an 8% interest rate. The answer requires determining the future value of these deposits and then calculating the annuity payment for the retirement period under the given interest rate.
Step-by-step explanation:
To calculate the expected annual payment that would be received from a life insurance fund after making a $10,000 annual deposit for 10 years at an interest rate of 8%, we need to understand the concepts of annuities and compound interest. This involves two different calculations: firstly, determining the future value of the annuity payments made during the deposit period (years 1 to 10), and secondly, calculating the amount of each annuity payment that will be made during the withdrawal period (years 11 to 30).
The future value of the annuity can be determined using the formula for the future value of an ordinary annuity. However, the specific calculations would require more information, such as whether the interest is compounded monthly or annually during the accumulation phase.
Once the total accumulated value is determined at the end of year 10, the annual payment can be calculated using the present value of an annuity formula, considering a fixed interest rate of 8% over the 20-year period of withdrawal. It's important to note that these calculations are based on several assumptions and the actual payments could be influenced by taxes, fees, and changes in the interest rate.