This is a type of Flexible premium annuity.
What is an annuity?
An annuity is a long-term investment that is available to be purchased from an insurance company and is supposed to help us from the risk of living without income our income.
It is given that we have decided to invest $500 each year. This amount is invested for the next 5 years. This means that the period is fixed and the amount is invested in installments.
This means it is a flexible premium annuity.
A flexible premium annuity is an annuity that we pay in installments over a period of a few years and that we will receive payments from the annuity in the future.
Thus, we have determined the type of annuity that is given here.
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