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Ken Tuckie Is About to Buy a 25-Year Annuity That

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Ken Tuckie is about to buy a 25-year annuity that will deliver end-of-month payments. The first payment will be $1,000. How much more will it cost to index the annuity so that payments grow at the rate of 2.4% compounded monthly? Assume the money used to purchase the annuity earns 5.4% compounded monthly.

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