Professor’s Annuity Corp. offers a lifetime annuity to retiring professors. For a payment of $21,000 at age 70, the firm will pay the retiring professor $2,250 a semi-annual until death. If the professor’s remaining life expectancy is 10 years, what is effective annual interest rate on this annuity?

Answer rating: 100% (QA)

To calculate the effective annual interest rate on this annuity we can use the present value formula ... View the full answer