Terms of Two Actuarially Equivalent Annuities: Annuity a Annuity B

Multiple Choice

Terms of two actuarially equivalent annuities: Annuity A Annuity B Issue age 40 40 Type of annuity Perpetuity Life annuity Frequency of payment Monthly MonthlyTiming of payment End of Month End of MonthAmount of each payment P 1,000Selected values: x q x D x Nx 40 0.002125 651 870041 0.002327 607 8049 In what range is P?

A) Less than $860
B) $860 but less than $875
C) $875 but less than $890
D) $890 but less than $905
E) $905 or more