A man aged 40 wishes his dependents to have $40,000 at his death. A banker agrees to pay this amount to his dependents on condition that the man makes equal annual payments of $ x to the bank commencing now and going on until his death. What should be the value of x, assuming that the bank pays interest at 3% p.a. compound? From the table on the expectation of life it is found that the expectation of life of a man of 40 is 30 years.

A man aged 40 wishes his dependents to have $40,000 at his death. A banker agrees to pay this amount to his dependents on condition that the man makes equal annual payments of $ x to the bank commencing now and going on until his death. What should be the value of x, assuming that the bank pays interest at 3% p.a. compound? From the table on the expectation of life it is found that the expectation of life of a man of 40 is 30 years.