Question: George, aged 5 0 , is considering purchasing two annuities: ( i ) a 2 0 - year annuity certain with an annual benefit of
George, aged is considering purchasing two annuities:
i a year annuity certain with an annual benefit of $ payable continuously, or
ii a year temporary life annuity with an annual benefit of $ 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 years. You may assume that and
Determine the value of the invested savings after the years.
A Less than $
B At least $ but less than $
C At least $ but less than $
D At least $ but less than $
E At least $
The final answer is $
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