Question: George, aged 5 0 , is considering purchasing two annuities: ( i ) a 2 0 - year annuity certain with an annual benefit of

George, aged 50, is considering purchasing two annuities:
(i) a 20-year annuity certain with an annual benefit of $10,000 payable continuously, or
(ii) a 20-year temporary life annuity with an annual benefit of $10,000 payable continuously.
The cost for either annuity is its single benefit premium.
George opts for the temporary life annuity, and he invests the savings (the difference in single benefit premiums) immediately. George survives the 20 years. You may assume that =0.04 and =0.06.
Determine the value of the invested savings after the 20 years.
(A) Less than $80,000
(B) At least $80,000, but less than $105,000
(C) At least $105,000, but less than $130,000
(D) At least $130,000, but less than $155,000
(E) At least $155,000
The final answer is $99607.36
 George, aged 50, is considering purchasing two annuities: (i) a 20-year

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