QuestionMay 24, 2025

In Jude's declared-rate foxed annuity annuitization, the rate is 4% She will receive 10,000 in the first year. How much will she receive in the second year? Answers A 10,000 B 10,400 B 9,600 D Depends on the inv investment performance of the insurer's general account.

In Jude's declared-rate foxed annuity annuitization, the rate is 4% She will receive 10,000 in the first year. How much will she receive in the second year? Answers A 10,000 B 10,400 B 9,600 D Depends on the inv investment performance of the insurer's general account.
In Jude's declared-rate foxed annuity annuitization, the rate is 4%  She will receive 10,000 in the first year. How much will she receive in the
second year?
Answers
A 10,000
B 10,400 B
 9,600
D Depends on the inv investment performance of the insurer's general account.

Solution
4.2(218 votes)

Answer

B \10,400 Explanation 1. Identify the annuity type Jude's annuity is a declared-rate fixed annuity, meaning the payment increases by a fixed rate annually. 2. Calculate the second-year payment Apply the formula for calculating the next year's payment: **Future Value = Present Value \times (1 + Rate)**. Here, Future Value is the second-year payment, Present Value is \10,000, and Rate is 4% or 0.04. Calculation: \10,000 \times (1 + 0.04) = \10,400.

Explanation

1. Identify the annuity type<br /> Jude's annuity is a declared-rate fixed annuity, meaning the payment increases by a fixed rate annually.<br /><br />2. Calculate the second-year payment<br /> Apply the formula for calculating the next year's payment: **Future Value = Present Value \times (1 + Rate)**. Here, Future Value is the second-year payment, Present Value is \$10,000, and Rate is 4% or 0.04.<br /> Calculation: \$10,000 \times (1 + 0.04) = \$10,400.
Click to rate:

Similar Questions