Variable Annuity Comparison

Marie Richard purchases a new sports car for $35,500. What is the monthly payment if Marie agrees to pay for the car in 48 months if the car dealer is offering an interest rate of 6.5% APR? Marie wishes to pay off the loan completely after one year of monthly payments. How much would this lump sum payment be?

• If you hit the lottery for a large amount (over 5 mil) would you want an annuity or lump sum?
• How would you do this algebra on a spreadsheet?
• Will you show how to get the answer to this geometric annuities problem?
• If I had an annuity that paid average interest for 23 years on 150,000-how much would it be worth today?