An Insurance Company Plans to Sell Annuities to Investors

An insurance company plans to sell annuities to investors. Based on actuarial calculations, an investor has a 18-year life span, and he wants a $40,000-per-year annuity, payable at the end of each year. If the insurance company uses a 3.78% assumed investment rate, how much should the annuity cost?

A) $496,928
B) $512,236
C) $515,548
D) $553.982