Asked by Megan Smith on May 27, 2024
Verified
Rory has purchased a product from an insurance company that requires the insurance company to pay him $5,000 each year, and he will continue to receive these payments until he dies. This series of payments is called
A) a portfolio.
B) a bond.
C) a dividend.
D) an annuity.
Annuity
A financial product that pays out a fixed stream of payments to an individual, typically used as an income stream for retirees. It's a contract between an individual and an insurance company.
- Comprehend and assess the conditions and propositions associated with savings accounts and financial investments.
Verified Answer
CM
Ciala ManagadzeJun 01, 2024
Final Answer :
D
Explanation :
An annuity is a financial product that pays out a fixed stream of payments to an individual, typically used as an income stream for retirees. In this case, the insurance company's agreement to pay Rory $5,000 each year for the rest of his life fits the definition of an annuity.
Learning Objectives
- Comprehend and assess the conditions and propositions associated with savings accounts and financial investments.
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