At retirement in December, you buy a special type of insurance policy called an immediate...
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At retirement in December, you buy a special type of insurance policy called an immediate term annuity. This policy promises to pay the holder (or the holders heirs) $25,000 per year for the next 25 years. Each payment is at the start of the year. (Hence, the first payment will be very shortly after purchase of the policy.) The appropriate discount rate is 2.01% per year, compounded annually. What is the value of this policy to the policy holder?
Do not round at intermediate steps in your calculation. Report your answer in dollars. Enter your answer without the $ symbol.
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