Assignment

Pearland Medical Center’s board recently decided to investigate ways to increase revenues. The organization

has the benefit of different revenue streams, including patient revenue and returns on investments.

Task for this assignment
Suppose the board were going to invest in an ordinary annuity requiring a payment of $10,000 over the next

five years with an interest rate of 5%. What is the future value of this ordinary annuity investment?
The board is considering other options for investing as well. For example, they want to double their

investment of $70,000 over the next 12 years by using conventional securities with a projected return of 6%.

Does the present value of the investment indicate that this is possible?
Cosgrove and O’Connor (2009) argue that rapidly changing investment landscape poses a problem for consumers

earning revenue from investing. After reading Cosgrove and O’Connor’s article and doing additional research,

respond to the following questions: What are the criteria you, acting in a fiduciary capacity as a trustee

for your clients, should examine in considering annuities? What are the common characteristics of variable

annuity and equity-indexed annuity? Why did the federal government classify equity-indexed annuities as

“securities” under the federal securities laws? Who does it benefit? List and identify five key issues for a

client’s investment in, or sale of, variable annuities and/or equity-indexed annuities.

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