Suppose you have $500,000 to purchase an annuity. Currently the annuity payments are $35,000 per year as

Question:

Suppose you have $500,000 to purchase an Currently the payments are $35,000 per year as long as you live. What do you think would happen to the payments if interest rates increased? Explain carefully.
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,...