Suppose a 65-year-old person wants to purchase an annuity from an insurance company that would pay $20,700 per year until the end of that person’s life. the insurance company expects this person to live for 15 more years and would be willing to pay 7 percent on the annuity. how much should the insurance company ask this person to pay for the annuity? b. a second 65-year-old person wants the same $20,700 annuity, but this person is healthier and is expected to live for 20 more years. if the same 7 percent interest rate applies, how much should this healthier person be charged for the annuity?
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Suppose a 65-year-old person wants to purchase an annuity from an insurance company that would pay $...
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