Terri purchased an annuity for $100,000. She was to receive $10,000 per year and her life expectancy was 20 years.
She died after receiving 8 payments. Terri's final return should reflect a loss of $20,000 ($100,000 - $80,000).

Question

Quizplus · Accepted Answer

Terri received a total of $80,000 ($10,000 x 8 years) before her death, which means she did not receive the full $100,000. Therefore, her final return should reflect a loss of some amount less than $20,000.

Terri Purchased an Annuity for $100,000