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3) You are at retirement age and one of your benefit options is to accept a monthly annuity of $5,900 for 20 years. What lump
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Answer #1

PMT =5900
Number of Periods =20*12 =240
Rate per month =4.5%/12
PV of Lump sum amount =PMT*((1-(1+r)^-n)/r =5900*((1-(1+4.5%/12)^-240)/(4.5%/12)) =932586.08

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