Your aunt is about to retire, and she wants to sell some of her stock and buy

Question:

Your aunt is about to retire, and she wants to sell some of her stock and buy an annuity that will provide her with income of $50000 per year for 30 years, beginning a year from today. The going rate on such annuities is 7.25%. How much would it cost her to buy such an annuity today?

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,...