If an insurance company sells a 150,000 life insurance policy for 600 premium per year and the probability of living out the year is .9965, what is the expected value to the insurance company

Q: ustomers buy this product on their 65th birthday when they retire. The annuity will make 20 annual…

A: There is need of proper planning for retirement so if done properly on time than will have good…

Q: A life insurance company will sell a 20 year annuity paying $1,600 at the end of each month for…

A: Solution:-When an equal amount is paid each period at end of period, it is known as ordinary…

Q: The Perpetual Life Insurance Company is trying to sell you an investment policy that will pay you…

A: Perpetuity is the stream of cash flows or payments that are made at equal intervals that do not have…

Q: A company wants to determine how much it should pay to purchase a particular ordinary annuity today.…

A: Formula for finding PV  PV=Payment per month*[{1-{1+interest rate)^(-Time period)}}/interest rate]…

Q: an investor paid$58000 for an investment. he will get$5780,for every 2 years(forever). what is his…

A: 5780= [58000×{(1+r)^no. of years)}]-58000 5780= [58000×{(1+r)}]-58000 [{(5780+58000)÷58000}-1]÷2…

Q: After consulting with your financial advisor, you figured that you need $9,000 per year for your…

A: Retirement fund planning is a strategic financial process aimed at ensuring a secure and comfortable…

Q: An engineering company currently pays $18,175 a quarter for insurance. They pay on the 1st day of…

A: The quarterly interest rate will be the rate with equates the present value of the quarterly…

Q: A life insurance co. is trying to sell you an investment policy that will pay you and your heirs…

A: Perpetuity refers to a financial concept where a stream of cash flows continues indefinitely. It is…

Q: you are 47 and have a 270,000 face amount 13-year limited payment participating policy. Your annual…

A: Face amount = 270,000Number of years = 13 yearsAnnual premium = 945Cash value = 10,813Annual yield =…

Q: You have received a settlement from an insurance company which will pay you $100,000 per year for 12…

A: Present Value is the amount of money on hand currently, whereas future value is the amount of…

Q: You have decided to buy an annuity from a life insurance company that provides an annual payment of…

A: An annuity is a financial product or investment contract that provides a series of regular payments…

Q: You have set up a life annuity with a present value of $250,000. If your life expectancy at…

A: Using the PMT function in excel

Q: You have just received a windfall from an investment you made in a friend's business. She will be…

A: The Present Value refers to a concept that states the discounted value or say value at today's time…

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A: Due to inflation prices increase but if the interest rate do not increase in the proportion than…

Q: What is the total interest you will have paid for the scenario below? The home you purchased was…

A: Payment per period can be calculated using PMT function in excel.PMT(rate, nper, pv, [fv],…

Q: he Perpetual Life Insurance Co. is trying to sell you an investment policy that will pay you and…

A: The fair value of the policy depends on the interest rate and annual payment from the policy and…

Q: uppose you purchase an insurance policy today that will provide you with $250,000 when you retire in…

A: Insurance is a contractual agreement between an individual (or a group) and an insurance company, in…

Q: What’s the present value of a perpetuity that pays $1500 per year if the appropriate  interest rate…

A: Cash flow per year is $1500 The interest rate is 15% To Find: the present value of a perpetuity

Q: In calculating insurance premiums, the actuarially fair insurance premium is the premium that…

A: Insurance premium refers to the premium paid by the insurer to the insurance company for the purpose…

Q: Assuming annual interest rates on comparable investments are 3,5%. What annual income could be…

A: Interest Rate= 3.5% Time Period of Annuity = 25 years Savings invested in annuity = 140,000

Q: An investor is considering an annuity that pays $40,000 per year for four years.  1. Assuming the…

A: (answer of first 3 parts, please specify if any other part is required) We can compute the present…

Q: An insurance company offers a retirement annuity that pays 100,000 per year for 15 years, gorwing at…

A: An Annuity is a stream of regular periodic payments made or received for a specified period of time…

Q: Your insurance agent is trying to sell you an annuity that costs $80,000 today. By buying this…

A: Present value is an estimate of the present value of future cash values ​​that may be received at a…

Q: An investor may deposit $2,000 into both a traditional IRA and a Roth IRA. After 30 years, given a…

A: Investment means engaging the funds to generate income for the coming time. Compounding is a way to…

Q: A new investment opportunity for you is an annuity that pays $560 at the beginning of each year for…

A: Annual payment (P) = $560Interest rate (r) = 5.4% or 0.054Payment time = BeginningNumber of years…

Q: Assume you currently have $220,000 that you are ready to invest for retirement. In addition, you…

A: Compounding is a technique which is used to find the FV of present amount by using appropriate…

Q: You are given the following information about a person aged exactly x: 9x = 0.03, 9x+1 = 0.04, 9x+2…

A: The expected present value is used to find out the value of an investment based on the concept of…

Q: Give typing answer with explanation and conclusion An insurance company offers a policy by which a…

A: One of the useful concept used in finance is time value of money. As per this concept, a dollar…

Q: How many years would it take save an adequate amount for retirement if he deposits $2,100 per month…

A: A study that proves that the 1value of money today is higher than the future value of money is term…

Q: After consulting with your financial advisor, you figured that you need $100,000 per year for your…

A: An annuity is a series of constant payment of a sum, yielding a certain rate of return.Information…

Q: Moe's Life Insurance Co. is trying to sell you an investment policy that will pay you and your heirs…

A: Given details are : Annual cash flow for forever = $15000 Required return = 9% We need to compute…

Q: Use the following table to calculate the minimum premium an insurance company should charge for a…

A: A financial agreement or contract between an insurance company and a person or entity (the…

Q: Your insurance agent is trying to sell you an annuity that costs $55,000 today. By buying this…

A: Compound = Monthly = 12Present Value of Payment = $55,000Monthly Payment = $285Number of Payment =…

Q: (Solving for i) An insurance agent just offered you a new insurance product that will provide you…

A: It is a problem that requires calculating the interest rate earned on the investment. The interest…

Q: You recently had an auto accident that was your fault. If you have another accident or receive a…

A: a.

Q: company offers you employment for the next 30 years until retirement but will not pay you a pension…

A: In this we have to calculate the monthly deposit upto retirements and than how much can be withdrawn…

Q: There is an insurance plan worth $4,000 , which will return $2,200  per year for the next two years…

A: Present Value:  The present value is the value of cash flow stream or the fixed lump sum amount at…

Q: Suppose you are paid $2400 per month and your employer's 401(k) matches your contributions by 50% up…

A: The 401k contributions are the contribution made by the employee and employer for the retirement of…

Q: You have purchased a guaranteed investment contract (GIC) from an insurance firm that promises to…

A: Initial value (I) = $20,000 Interest rate (r) = 0.05 Period (n) = 6 Years   Amount we get in 6 years…

Q: Curly's Life Insurance Co. is trying to sell you an investment policy that will pay you and your…

A: In this case we need to compute the value of policy today. Insurance company will pay $34000 per…

Q: After consulting with your financial advisor, you figured that you need $9,000 per year for your…

A: Value of annuity is the present value of payments from the annuity based on the interest rate and…

Q: If you save $1298 per year for the next 17 years and earn 7.2% interest on your savings, how much…

A: The future value of annual savings is computed based on the time value of money concept. As per this…

Types of Insurance Contract

Insurance is a contract wherein an individual or entity gets financial protection from the insurance company for any damages or losses incurred. The individual or entity is called the insured, whereas the insurance company is called the insurer. The insured and the insurer enter a legal contract for a fixed term called the insurance term, and the contract is called an insurance policy.