Problem:
Your uncle is about to retire, and he wants to buy an annuity that will provide him with $5,100 of income a year for 22 years, with the first payment coming immediately. The going rate on such annuities is 5.25%.
Required:
How much would it cost him to buy the annuity today?
- $60,093.31
- $68,382.04
- $84,959.50
- $69,072.76
- $54,567.48
Note: Explain all steps comprehensively.