Question: Question 1 Suppose a voluntary retirement annuity scheme is launched for 65-year-old people. If a lump- sum premium of $1,000,000 is paid, the annuitant will

Question 1 Suppose a voluntary retirement annuity scheme is launched for

Question 1 Suppose a voluntary retirement annuity scheme is launched for 65-year-old people. If a lump- sum premium of $1,000,000 is paid, the annuitant will receive $5,800 at the end of every month. Assume the interest rate is 6% compounded monthly. How many payments the annuitant will expect to receive, and what is the expected net gain of this annuity? [Hints: the expected lifetime is 81.32 years]

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