Now That Your Uncle Has Decided to Retire, He Wants

Multiple Choice

Now that your uncle has decided to retire, he wants to buy an annuity that will provide him with $85, 000 of income a year for 25 years, with the first payment coming immediately.The going rate on such annuities is 5.15%.How much would it cost him to buy the annuity today?

A) $1, 063, 968
B) $1, 119, 966
C) $1, 178, 912
D) $1, 240, 960
E) $1, 303, 008