Suppose you have an annuity from an insurance policy and you have the option of being paid
Question:
Suppose you have an annuity from an insurance policy and you have the option of being paid \(\$ 250\) per month for 20 years or having a lump-sum payment of \(\$ 25,000\). Which has more value if the current rate of return is \(4.5 \%\), compounded monthly?
Fantastic news! We've Found the answer you've been seeking!
Step by Step Answer:
Answer rating: 100% (QA)
To determine which option has more value we need to compare the present value of the annuity payment...View the full answer
Answered By
Muhammad Umair
I have done job as Embedded System Engineer for just four months but after it i have decided to open my own lab and to work on projects that i can launch my own product in market. I work on different softwares like Proteus, Mikroc to program Embedded Systems. My basic work is on Embedded Systems. I have skills in Autocad, Proteus, C++, C programming and i love to share these skills to other to enhance my knowledge too.
3.50+
1+ Reviews
10+ Question Solved
Related Book For
Question Posted:
Students also viewed these Sciences questions
-
KYC's stock price can go up by 15 percent every year, or down by 10 percent. Both outcomes are equally likely. The risk free rate is 5 percent, and the current stock price of KYC is 100. (a) Price a...
-
An insurance policy offers you the option of being paid \(\$ 750\) per month for 20 years or a lump sum of \(\$ 100,000\). Which has more value if the current rate of return is \(5.5 \%\), compounded...
-
Mrs. B, recently widowed and in her mid to late 40s, is a senior executive working for a Singapore-based multi-national corporation with SGD 10 billion in global sales. She has a son aged 20 and a...
-
Find a couple of bad project management examples from around the world. What were the reasons for the failure? (500 words max) Find a couple of good project management examples from around the world....
-
A weightless piston divides a thermally insulated cylinder into two equal parts. One part contains one mole of an ideal gas with adiabatic exponent 7, the other is evacuated. The initial gas...
-
Why might a company have a legal duty to retain records? Give an example.
-
What the differences are between arbitration and mediation?
-
1. Was an online survey the best medium for a poll on this subject? What were some pros and cons of conducting this poll online? 2. How might the results have differed if this poll had been conducted...
-
Greenmount Ltd, an ASX listed consumer goods corporation aims to acquire a fashion business to generate new growth opportunities. Following a formal search process, external advisors have identified...
-
I recently found a real-life advertisement in the newspaper: (Only the phone number has been changed.) Suppose that you have won a \(\$ 20,000,000\) lottery, paid in 20 annual installments. How much...
-
You look at your budget and decide that you can afford \(\$ 250\) per month for a car. What is the maximum loan you can afford if the interest rate is \(3 \%\) and you want to repay the loan in 4...
-
Describe two synthetic routes for the preparation of p-methoxyaniline with benzene as the starting material.
-
Create a program that writes to a file named NumberList.txt; it should use a loop to write the numbers 1 through 100 to the file, each in a separate line, then closes the file. Snap shots of code and...
-
A pension fund manager is considering three mutual funds. The first is a stock fund, the second is a long-term government and corporate bond fund, and the third is a T-bill money market fund that...
-
When would you choose to use containers in Windows and when would you choose to use containers in Linux? How are they different? How are they similar?
-
Actuary and trustee reports indicate the following changes in the PBO and plan assets of Mahomes Industries during 2024: Prior service cost at January 1, 2024, from plan amendment at the beginning of...
-
Personal Property Security Act (PPSA) Priority of Secured Creditors Secured Party has prior claim to collateral over Debtor Among Secured Parties, (same collateral) First to register has priority...
-
What is interest cost? Briefly describe imputation of interest.
-
Use of the contraceptive Depo Provera appears to triple women's risk of infection with chlamydia and gonorrhea , a study reports today. An estimated 20 million to 30 million women worldwide use Depo...
-
Describe a kinetic pump.
-
Name three classifications of kinetic pumps.
-
Describe the action of the impellers and the general path of flow in the three types of kinetic pumps.
-
The information presented here represents selected data from the December 31, 2022, balance sheets and income statements for the year then ended for three firms: Required: Calculate the missing...
-
Before Concord Corporation engages in the following treasury stock transactions, its general ledger reflects, among others, the following account balances (par value of its stock is $30 per share)....
-
Given the following data answer the questions: ANDERSON COMPANY Contribution Income Statement Sales For Month of October Less variable costs Direct materials Direct labor Variable factory overhead...
Study smarter with the SolutionInn App