The correct answer is: D. Duration of annuity payments.
An annuity is a series of equal payments made at regular intervals for a fixed period of time. The amount of annuity payable is inversely related to the duration of annuity payments. This means that the longer the duration of annuity payments, the lower the amount of each payment will be.
Here is a simple example to illustrate this concept. Let’s say you want to purchase an annuity that will pay you $1,000 per month for 20 years. If you choose a 10-year annuity, the monthly payment will be higher than if you choose a 20-year annuity. This is because the insurance company will have to invest less money to cover the payments for a shorter period of time.
The other options are not correct because they are directly related to the amount of annuity payable. The principal sum of money is the amount of money you invest in the annuity. The investment period is the length of time you will invest the money. The rate of return is the amount of interest you earn on your investment. All of these factors will affect the amount of annuity payable.