Assume that at retirement you have accumulated $500,000 in a variable annuity contract. The assumed investment return is 6%, and your life expectancy is 15 years. What is the hypothetical constant-benefit payment?
A) $30,000.00
B) $33,333.33
C) $51,481.38
D) $52,452.73
E) The answer cannot be determined from the information provided.

Question

Quizplus · Accepted Answer

The hypothetical constant-benefit payment can be calculated using the formula for the present value of an annuity. With a 6% return and a 15-year life expectancy, the payment is approximately $51,481.38.

Assume That at Retirement You Have Accumulated $500,000 in a Variable