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You read the following add in Fresno Bee: An investment company is offering you the following...

You read the following add in Fresno Bee: An investment company is offering you the following opportunity for investing: Invest $1000 each year for 10 years with us, and then after that we will give $1000 for life/. Does age matter?

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Answer #1

Yes, higher the age, lesser will be the annuity that the Copany has to pay

Consider a person who is 20 years old, he will invest $1000 per year for 10 years. Assuming an expected age of 90, He will get $1000 for 60 years

If there is another person who is 60 years old, he will invest $1000 per year for 10 years. Assuming an expected age of 90, He will get $1000 for only 20 years. This means he will get a lesser amount and the company will benefit more in this case.

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