monthly payment if you take this loan ? b . Alternatively , you can get a 15-year mortgage with fixed monthly payments and an interest rate of 0.4 % per month . How much would your monthly payments be if you take this loan instead ?
* A . 1 . This problem is from the Appendix to Chapter 4 . Your grandmother bought an annuity from Rock Solid Life Insurance Company for $ 200,000 when she retired . In exchange for the $ 200,000 , Rock Solid will pay her $ 25,000 per year until she dies . The interest rate is 5 %. How long must she live after the day she retired to come out ahead ( that is , to get more in value than what she paid in )?