Settled lawsuit by offering guaranteed deferred

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QRS Insurance Company has settled a lawsuit by offering a guaranteed deferred (end of year payments) annuity. The recipient, Charles, will be paid $63,000 each year for 17 years. The discount rate is 7%, and the interest rate on the insurance company’s investments is 8%. How much must QRS set-aside today for making these payments? Why were QRS and Charles unable to settle on a one-time payment of $600,000?

Reference no: EM131354787

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