Suppose your great-uncle is about ready to retire and talks with you about an option his financial planner has been discussing with him.

Q: Suppose your great-uncle is about ready to retire and talks with you about an option his financial planner has been discussing with him. The financial planner notes that a 25 year annuity ought to be sufficient for his remaining expected lifetime and explains the discount rate for the annuity he offers is 4.5% annually. What are the expected annual payments to your great-uncle if he uses his $1,750,000 in savings to purchase the annuity? His first payment is expected to start one year from today.