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Sophia purchased a variable annuity contract with $80,000 purchase payment Surrender charges begin with 6 percent in the firs
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Answer #1

Given

Variable annuity contract = $80000.

Surrender charge for 1st year = 6%

Withdrawable limit without charges= 9% of contract value = 80000*9% = $7200.

Amount drawn by sophia = $12900.

Therefore Surrender charge payable for 1st year = (12900-(80000*9%)) *6%

= (12900-7200)*6%

= 5700*6%

= $342.

Therefore Surrender charge = $342.

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