Explore BrainMass

Explore BrainMass

    Annuity versus revenue stream

    This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

    In relation to the many aspects of the business environment, is the stream an annuity?

    © BrainMass Inc. brainmass.com June 4, 2020, 5:11 am ad1c9bdddf

    Solution Preview

    First, let's look at the definition and description of an annuity.

    Types of annuities:
    Fixed annuities
    Variable annuities
    Equity-indexed annuities
    Immediate annuities
    Longevity annuities

    An annuity is an insurance product that pays out income, and can be used as part of a retirement strategy. Annuities are a popular choice for investors who want to receive a steady income stream in retirement.

    Here's how an annuity works: you make an investment in the annuity, and it then makes payments to you on a future date or series of dates. The income you receive from an annuity can be doled out monthly, quarterly, annually or even in a lump sum payment.

    The size of your payments is determined by a variety of factors, including the length of your payment period.

    You can opt to receive payments for the rest of your life, or for a set number of years. How much you receive depends on whether you opt for a guaranteed payout (fixed annuity) or a payout stream determined by the performance of your annuity's underlying investments (variable annuity).

    While annuities can be useful retirement planning tools, they can also be a lousy investment choice for certain people because of their notoriously high ...

    Solution Summary

    This solution provides a discussion regarding the revenue of a business versus the annuity.