Monthly rate on annuity


Problem:

Professor's Annuity Corp. offers a lifetime annuity to retiring professors. For a payment of $70,000 ("present value") at age 65, the firm will pay the retiring professor $350 a month until death. If the professor's remaining life expectancy is 20 years, what is the (implied) monthly rate on this annuity? Please explain in detail and also provide all workings.

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Finance Basics: Monthly rate on annuity
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