An insurance company is offering monthly payments of $ 250 for the next twenty years in exchange for a one- time payment of $40, 000 today. What is the rate of return on this offer? 3.63% Correct Answer 4.36 % 5.21 % 6.39% Incorrect Response 7.50%

Q: Question 6 What is the amount you can withdraw at the end of 20 years if you make $1,500 monthly…

A: Future value of ordinary annuity = A x [(1+i)^t - 1] / iwhereA = Periodic cash flow = Monthly…

Q: You want to buy a new sports car from Muscle Motors for $55,000. The contract is in the form of an…

A: Loan amount (P) = $55,000Monthly interest rate (r) = 0.07 / 12Number of monthly payments (n) =…

Q: What single payment today would replace a payment of $550 in 2 years and a payment of $5,500 in 6…

A: We will calculate present value of both the payments due in future years to know single payment that…

Q: If you wish to withdraw $200 at the end of EACH of the next 3 years earning 3.5% per year, what…

A: Present Value of annuity refers to the current value of all the series of payments or income at…

Q: You have contracted to buy a house for $430,000, paying $130,000 down and taking out a fully…

A: Here, Cost of House is $430,000 Down Payment is $130,000 Annual Interest Rate is 5.7% Time Period of…

Q: If you put up 23,000 today in exchange for a 6 percent, 10-year annuity, what will the annual cash…

A: Invested Amount = $ 23000Interest Rate = 6% Compounded AnnuallyPeriod = 10 YearsAnnual Cash Flow = ?

Q: You receive a credit card application from XYZ Banks Savings and Loan offering an introductory rate…

A: "Hi, Thanks for the Question. Since you asked multiple questions under one question, we will answer…

Q: We Pay Insurance Company will pay you $1,575 each quarter for 25 years. You want to earn a minimum…

A: The concept of time value of money will be used here. This concept states that worth of money…

Q: Based on historical data, an insurance company estimates that a particular customer has a 1.7%…

A: An insurance contract is a contract between two parties, in which one party promises to cover loss…

Q: Say that you purchase a house for $206,000 by getting a mortgage for $185,000 and paying a $21,000…

A: House Cost =  $206,000 Down Payment = $21,000 Mortgage Amount = $185,000 Time Period = 25 Years…

Q: If you put up $30,000 today in exchange for a 6.50 percent, 15-year annuity, what will the annual…

A: A series of fixed payments that are paid or received at an equal time interval is term as the…

Q: Assume that you contribute $240 per month to a retirement plan for 15 years. Then you are able to…

A: Here, To Find: Future value of multiple annuities =?

Q: Provide answer with explantion of correct and incorrect option

A: The objective of this question is to find out how long it will take for the customer to pay off his…

Q: a. What is the monthly return on this investment vehicle? (Do not round intermediate calculations…

A: The effective annual interest rate is a crucial concept in finance that is used to describe the true…

Q: 17. You are considering two insurance settlement offers. The first offer includes annual payments of…

A: Present value refers to the current value of the future cash flow. present value of the future cash…

Q: An insurance policy pays $50,000 immediately or $4,000 every 6 months for 10 years beginning now.…

A: Interest rate refers to the charge at which the loan is to be provided by the lender to the borrower…

Q: SBC Inc. owes your firm $90,000. This amount is seriously delinquent so your firm has offered to…

A: Loan amortization is a systematic repayment of loan amount that includes both interest and principal…

Q: What is the present value of an annuity that pays $58 per year for 13 years and an additional $1,000…

A: PMT = 58 Period = 13 years  Nominal rate of interest = 7.23% Additional amount = 1000

Q: pm.3 You have S81, 455.75 in a brokerage account, and you plan to deposit an additional $22,000 at…

A: The problem is a future value of a series problem in finance. We are given the present value…

Q: Q19 Compute the present value of an $1,450 payment made in 10 years when the discount rate is 12…

A: Solution:- When an amount is invested somewhere, it earns interest on it. The payment initially made…

Q: to withdraw from the account each month. Find the number of withdrawals under each of the following…

A: Ordinary Annuity: It represents a series of annuity payments made at the end of each period.…

Q: To establish a revenue stream for your retirement, you deposit $89000 in an account with a nominal…

A: Information Provided: Initial Deposit = $89,000 Monthly payments = $311.50 Interest rate = 4.20%…

Q: Equitable Insurance Company offers a fixed indexed annuity to Dane. The annuity has a cap of 10% and…

A: Let's calculate the end-of-year balance for Dane's annuity with detailed steps: 1. Initial…

Q: A business acquaintance promises to deliver a $20 bill to you one year from today. How much should…

A: In this question we need to select the correct option from the given three options which explains…

Q: American General offers a 10-year annuity with a guaranteed rate of 9.39% compounded annually. How…

A: Present Value of Ordinary Annuity refers to the concept which gives out the discounted or today's…

Q: pays $520 at the end of each month. How much of Payment 37 will be interest? (Do not round the…

A: The interest is a cost associated with lending or borrowing money. It is the borrowing cost that you…