After consulting with your financial advisor, you figured that you need $100,000 per year for your living during 35 years of the retirement period. You consider buying an annuity contract that will pay $100,000 at the end of every year. Assuming a rate of return of 8%, how much do you need today to buy the ordinary annuity contract? O $1,455,457 $1,165,980 $1,165,457 O $1,133,457
After consulting with your financial advisor, you figured that you need $100,000 per year for your living during 35 years of the retirement period. You consider buying an annuity contract that will pay $100,000 at the end of every year. Assuming a rate of return of 8%, how much do you need today to buy the ordinary annuity contract? O $1,455,457 $1,165,980 $1,165,457 O $1,133,457
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
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Transcribed Image Text:After consulting with your financial advisor, you figured that you need $100,000 per year
for your living during 35 years of the retirement period. You consider buying an annuity
contract that will pay $100,000 at the end of every year. Assuming a rate of return of 8%,
how much do you need today to buy the ordinary annuity contract?
O $1,455,457
O $1,165,980
O $1,165,457
$1,133,457
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