If a single-premium immediate variable annuity is purchased for $200,000 and the average return on investment in the last five years has been 5 percent, what can be said about the size of the first monthly annuity payment?

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Quizplus · Accepted Answer

The size of the first monthly annuity payment from a variable annuity depends on the performance of the underlying investments, the annuitant's age, and the payout option chosen, among other factors. The average return in the past does not directly determine the size of the first payment.

If a Single-Premium Immediate Variable Annuity Is Purchased for $200,000