An Insurance Company Is Trying to Sell You a Retirement

Multiple Choice

An insurance company is trying to sell you a retirement annuity. The annuity will give you 20 payments with the first payment in 12 years when you retire. The insurance firm is asking you to pay $50,000 today. If this is a fair deal,what must the payment amount be (to the dollar) if the interest rate is 8 percent?

A) $9,472
B) $10,422
C) $12,824
D) $5,093
E) $11,874