Question
Suppose that a life insurance company has guaranteed a payment of $14 million to a pension fund 5.5 years from now. If the life insurance
Suppose that a life insurance company has guaranteed a payment of $14 million to a pension fund 5.5 years from now. If the life insurance company receives a premium of $10 million from the pension fund and can invest the entire premium for 5.5 years at an annual interest rate of 6%, will it have sufficient funds from this investment to perfectly meet the $14 million obligation?
A) Yes, there will be an excess of $591,151.19 B) Yes, there will be an excess of $691,151.19 C) Yes, there will be an excess of $791,151.19 D) Yes, there will be an excess of $891,151.19 E) No
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