Assume that Lina bought a permanent life insurance of $500,000 at the age of 25. At 32 she is starting her seventh year of policy, so she would like to know how much is the rate of return for the savings component of her policy in that seventh year. The annual premium is $1,200; the cash value at the end of the sixth year is $6,800 and $8,200 at the end of the seventh year; the dividend for the seventh year is $350; YPT for its age is $2.00. Determine the interest rate you will generate using the yearly rate of return Method.
Assume that Lina bought a permanent life insurance of $500,000 at the age of 25. At 32 she is starting her seventh year of policy, so she would like to know how much is the rate of return for the savings component of her policy in that seventh year. The annual premium is $1,200; the cash value at the end of the sixth year is $6,800 and $8,200 at the end of the seventh year; the dividend for the seventh year is $350; YPT for its age is $2.00. Determine the interest rate you will generate using the yearly rate of return Method.
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Assume that Lina bought a permanent life insurance of $500,000 at the age of 25. At 32 she is starting her seventh year of policy, so she would like to know how much is the
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