Question
A life insurance company estimates it will have to make 25 annual payments of $150,000 each to cover a clients policy. If the first payment
A life insurance company estimates it will have to make 25 annual payments of $150,000 each to cover a clients policy. If the first payment is expected to be made in 8 years and the firm uses an interest rate of 8.5%, how much will they have to invest today to cover this obligation?
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A. $6,666,226
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B. $799,295
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C. $1,952,510
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D. $867,235
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Financial Management Principles And Applications
Authors: Arthur J. Keown
9th Edition
013033362X, 9780130333629
