For life insurance policies, some of the premium pays for the cost of the insurance, and the remainder goes toward the cash value of the policy and earns interest like a savings account. Consider the following insurance company options. Company 1: pays 4.9% compounded monthly on the cash value of their policies Company 2: pays 4.92% compounded semiannually on the cash value of their policies What is the APY (annual percentage yield) offered by each company? (Round your answers to the nearest hundredth.) Company 1 % % Company 2 Which company offers a higher yield? Company 1 Company 2
For life insurance policies, some of the premium pays for the cost of the insurance, and the remainder goes toward the cash value of the policy and earns interest like a savings account. Consider the following insurance company options. Company 1: pays 4.9% compounded monthly on the cash value of their policies Company 2: pays 4.92% compounded semiannually on the cash value of their policies What is the APY (annual percentage yield) offered by each company? (Round your answers to the nearest hundredth.) Company 1 % % Company 2 Which company offers a higher yield? Company 1 Company 2
Advanced Engineering Mathematics
10th Edition
ISBN:9780470458365
Author:Erwin Kreyszig
Publisher:Erwin Kreyszig
Chapter2: Second-order Linear Odes
Section: Chapter Questions
Problem 1RQ
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As per company guidelines we are allowed to solve one question at a time so i am solving first one please resubmit the the remaining ones. thank you.
1.
The Formula for APY is given as,
where,
So, for Company 1: compounded monthly. so,
Now, put the values into the formula,
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