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Algebra and Trigonometry (6th Edition)
Algebra and Trigonometry (6th Edition)
6th Edition
ISBN:9780134463216
Author:Robert F. Blitzer
Publisher:Robert F. Blitzer
ChapterP: Prerequisites: Fundamental Concepts Of Algebra
Section: Chapter Questions
Problem 1MCCP: In Exercises 1-25, simplify the given expression or perform the indicated operation (and simplify,...
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6. An insurance company has an obligation to pay the medical costs for a claimant. Average annual claims costs today are 6750, and medical inflation is expected to be 3.25% per year. The claimant is expected to live an additional 16 years. Claim payments are made at yearly intervals, with the first claim payment to be made one year from today. Find the present value of the obligation if the annual interest rate is 5.8%. Answer: $88,329.18
Transcribed Image Text:6. An insurance company has an obligation to pay the medical costs for a claimant. Average annual claims costs today are 6750, and medical inflation is expected to be 3.25% per year. The claimant is expected to live an additional 16 years. Claim payments are made at yearly intervals, with the first claim payment to be made one year from today. Find the present value of the obligation if the annual interest rate is 5.8%. Answer: $88,329.18
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