Question
Julia Baker died, leaving to her husband Brent an insurance policy contract that provides that the beneficiary (Brent) can choose any one of the four
Julia Baker died, leaving to her husband Brent an insurance policy contract that provides that the beneficiary (Brent) can choose any one of the four options:
a. $55,000 immediate cash
b. $4,000 every 3 months payable at the end of each quarter for 5 years
c. $18,000 immediate cash and $18,000 every 3 months for 10 years, payable at the beginning of each 3 month period
D. $4,000 every 3 months for 3 years and $1,500 each quarter for the following 25 quarters, all payments payable at the end of each quarter.
Instructions:
If money is worth 2 1/2% per quarter, compounded quarterly which option would you recommend that Brent exercise? Show all work
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