Question
You decided to buy insurance to protect you and your loved ones. So, you signed a contract with Usask insurance company, where you paid $555,000
You decided to buy insurance to protect you and your loved ones. So, you signed a contract with Usask insurance company, where you paid $555,000 for an insurance. In return, the company will pay you and your heirs $25,000 a year forever. What kind of cash flow is this and what rate of return are you earning on this policy? A. Ordinary annuity. 4.31% B. Ordinary annuity. 3.93% C. Annuity due. 3.72% D. Perpetuity. 3.67% E. Perpetuity. 4.50% 2. If you want to get $6000 in 3 years by investing the same amount every week in a fund that offers 2.7% per quarter compound monthly, how much do you have to invest each week? Assume 4 weeks per month. A. $35.46 B. $40.16 C. $30.68 D. $45.96 E. $29.47
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