P4A-1 (similar to) Question Help Your grandmother bought an annuity from Rock So

Question

P4A-1 (similar to)

Question Help

Your grandmother bought an annuity from Rock Solid Life Insurance Company for

$ 430 comma 000$430,000

when she retired. In exchange for the

$ 430 comma 000$430,000,

Rock Solid will pay her

$ 40 comma 000$40,000

per year until she dies. The interest rate is

4 %4%.

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)?She must live at least

nothing

years. (Round up to the nearest integer.)

P4A-1 (similar to)

Question Help

Explanation / Answer

PV = 430,000

PMT = -40,000

rate = 4%

FV = 0

use Nper function in Excel to find the breakeven number of years

n = 14.33

she must live at least 15 years

Related Questions

Navigate

• Browse (All)
• Browse P
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.