Archive for September, 2009
Annuities and interest rates?
An annutiy consists of 20 annual payments of 85,000.
Interest rates from 5.5% to 7.5% were used, and i have to find the prices payable in the 2 years to secure this annuity.
I noticed that the higher the interest rates, the lower the price payable.
Can anyone write a brief report as to why this happens?
Compounded interest. Think of it the other way. Instead of the ending period you are at the beginning period. You deposit $1,000 in 2 seperate investments. One pays 5.5% and the other 7.5%. Which one will you have more money in after 2 years. The 7.5% investment, of course. Reverse the direction now and start with the same amount at the end. Which one do you have to put more money in to get the same amount at the end. the 5.5% investment, of course, because you earn less on your money and therefore must start out with more money. Hope that helps.
What is the Highest interest rate that I can earn on an Annunity?
If i place 1 million or 1/2million in an annuity then what is the highest rate of interest i can get? Will that mean that my money is not guaranteed or at some risk? Does that mean my agent who gives me this high yield annunity will get less commission?
Like if I were a teacher transferring my current annuity to another one, what is the safest annuity yet the highest paying, interest rate wise, regardless of the field i am looking for interest???
No of course not that is an open ended question in some regard, it depends on what type of annutiy. You know annutiies in the oil companies and in commodities is different form other annuites like tech companies etc. so know what type of annuity you are purchasing, what industry do you wna to invest in and start there. I would look at this as a long term investment.
Is the TaxCut program right when it comes to the National average Wages, Interest, Dividends, Unemployment?
I was using TaxCut 2005 and the cost of living adjusted amounts for the most recently released stats (tax year 2003) below were presented to me:
National Average
Wages $67,182
Interest Income 1,465
Dividends 2,308
Taxable pensions and annuities 22,921
Unemployment compensation 4,981
How is it there are that many people with that high of:
interest income
Dividends
and Unemployment comp?
I hope there isn’t someone out there with these exact amounts or there is something wrong here. 
Does the taxable pensions and annuities line most likely just reflect retired people?
These figures scare me.
Those numbers do sound high. Is it possible that this is the average family income for a family that pays income taxes? I’m pretty sure it’s not average income of everybody in the country, but since most very low-income people don’t pay taxes,this could just be possible. For example, last year any individual making under $8200, and any married couple filing jointly making under $16,400, would not have paid income taxes, unless they were dependents of someone else, and many dependents would still not have paid tax. And for a large number of people, their social security income is not taxable. Take all of the people in those categories out of the calculation, and might be right.
Also, remember that "average" can mean numerical average (add up the numbers and divide by the number of entries, so the very rich skew the figure), median (the middle value if you line all the values up numerically – this is normally used for average wages or income), or mode (the most common, not likely what’s being used here).