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q23 You are given the following situations for (x): $100,000 is used to purchase...

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Finance

q23

You are given the following situations for (x):

  1. $100,000 is used to purchase a whole life annuity due that provides for annual payments of $R1 where R1 is calculated using the 2017 CSO mortality table and i = 3.5%.
  2. $100,000 is used to purchase a 30-year temporary life annuity due that provides for annual payments of $R2 where R2 calculated using the 2017 CSO mortality table and i =3.5%.
  3. $250,000 is used to purchase an ordinary whole life annuity that provides for annual payments of $R3 where R3 is calculated using the 2017 CSO mortality table and i = 3.5%
  4. $250,000 is used to purchase an ordinary whole life annuity that provides for annual payments of $R4 where R4 is calculated using the 2017 CSO mortality table and i = 5.0%

Which of the following statements is true?
  • A.

    R1 > R2 and R3 < R4

  • B.

    R1 < R2 and R3 > R4

  • C.

    R1 < R2 and R3 < R4

  • D.

    R1 > R2 and R3 > R4

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