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    Annuity Question (Grandma and Rock Solid Life Insurance)

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    Your grandmother bought an annuity from Rock Solid Life Insurance Co. for $200,000 when she retired. In exchange for the $200,000, Rock Solid will pay her $25,000 per year until she dies. The interest rate is 5%. How long must she live after the day she retired to come out ahead (that is, to get more in value that what she paid in)?

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    Annuity Question
    Your grandmother bought an annuity from Rock Solid Life Insurance Co. for $200,000 when she retired. In exchange for the $200,000, Rock Solid will pay her $25,000 per year until she dies. The ...

    Solution Summary

    This solution is comprised of a detailed explanation to answer how long must she live after the day she retired to come out ahead (that is, to get more in value that what she paid in).

    $2.19

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