Question
1. value: 1.00 points Peg Gasperoni bought a $50,000 life insurance policy for $270 per year. Ryan Life Insurance Company sent her the following billing
1.
value: 1.00 points
| Peg Gasperoni bought a $50,000 life insurance policy for $270 per year. Ryan Life Insurance Company sent her the following billing instructions along with a premium plan example: |
| "Your insurance premium notice will be mailed to you in a few days. You may pay the entire premium in full without a finance charge or you may pay the premium in installments after a down payment and the balance in monthly installments of $70. The finance charge will be added to the unpaid balance. The finance charge is based on an annual percentage rate of 15%." |
| If the total policy premium is: | And you put down: | The balance subject to finance charge will be: | The total number of monthly installments ($30 minimum) will be: | The monthly installment before adding the finance charge will be: | The total finance charge for all installments will be: | And the total deferred payment price will be: |
| $270 | $70.00 | $ 200.00 | 3 | $70.00 | $ 5.18 | $275.18 |
| 370 | 90.00 | 280.00 | 4 | 70.00 | 8.94 | 378.94 |
| 470 | 115.00 | 355.00 | 6 | 70.00 | 14.22 | 484.22 |
| Peg feels that the finance charge of $5.18 is in error. Check your answer. |
| a. | What is the actual finance charge for the first three months? (Round your answer to the nearest cent.) |
| Finance Charge | $ |
| b. | Is she correct? | ||||
|
rev: 11_22_2014_Q
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The Social Media Handbook For Financial Advisors
Authors: Matthew Halloran
1st Edition
1118208013, 978-1118208014
