Identify the type of annuity: Invest one lump sum at age 50. Payout at $10k per...

Question

Question

Identify the type of annuity:

Invest one lump sum at age 50.

Payout at $10k per annum, starting five years later for the next 20 years (till age 75).

business finance

Answer 1

Answer #1

Invest one lump sum at age 50.

Payout at $10k per annum, starting five years later for the next 20 years (till age 75).

This is an ordinary annuity starting 5 years.

In an ordinary annuity the number of payments is fixed: 20 years

The payment amount is fixed: $10,000 per year

And the payments are periodic: Yearly

Answer 2

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