Fred asked two life insurance companies to give quotes on a 20-year deferred annuity (after a 5-year

Question:

Fred asked two life insurance companies to give quotes on a 20-year deferred (after a 5-year deferral period) that can be purchased for $100,000. Northwest Mutual quoted payments of $875 payable at the end of each month. Liberty Standard stated that all their options provide a rate of return equal to 5.5% compounded annually. Which company should Fred choose?
Annuity
An annuity is a series of equal payment made at equal intervals during a period of time. In other words annuity is a contract between insurer and insurance company in which insurer make a lump-sum payment or a series of payment and, in return,...