Example Of An Annuity

An annuity of 400 a month for 5 years.

Example of an annuity. According to our math you will have to live until age 85 to break even on the investment and if you live past 85 the insurance company. Annuity Formula Example 2 Let say your age is 30 years and you want to get retired at the age of 50 years and you expect that you will live for another 25 years. The first example is a fixed annuity.

Other contracts might specify payments for the life of the contract holder. Life annuities and term certain annuities. Suppose that you invest 2000 per year in a stock index fund for the next ten years which earns 9 per year.

Installment payments Rental payments Life insurance premiums Weekly wages Periodic pensions 2. For 25 years after retirement. With an annuity due by contrast payments come at the beginning of each period.

This is the value of the initial deposit. A pension plan is a type of retirement plan for which an employer contributes to a workers pool of account funds. Valuing an Ordinary Annuity.

Some examples of annuities are. Example of a Variable Annuity. 300000 1000 300 months 300 months 12 25 years to recover investment.

What is the closest value of the accumulated value of the investment after you make the last payment. The annuity would have a 4 annual interest rate. To find the amount of an annuity we need to find the sum of all the payments and the interest earned.