You are the beneficiary of a life insurance policy. The insurance company informs you that you have two options for receiving the insurance proceeds. You can receive a lump sum of $50,000 today or receive payments of $641 a month for 10 years. You can earn 6.50% on your money. What option should you take and why?

Q: Roger has found a home to be purchase for $219,626 and has agreed to pay 30% down. Find the amount…

A: Annuity refers to series of annual payment which are paid or received at start or end of specific…

Q: Kenji wants to buy a $150,000 term life insurance policy. He is 30 years old. Using the premium…

A: We can use the provided table to determine the amount that Kenji will have to pay as premium.

Q: Assume that you begin saving 3% of your total income in an employer-provided retirement plan at…

A: The savings of the employee are increasing by fix rate of 2% each year, while the income is…

Q: You decide to open an individual retirement account (IRA) at your local bank that pays 8%/year…

A: A theory that helps to compute the present or future value of the cash flows is term as the TVM…

Q: Your employer offers a 401(k) plan with a 25% match, and you set a goal of retiring in 25 years with…

A:

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: On january 1, 2010, you put 1000.00 in a savings account that pays 6(1)/(4)% interest, and you will…

A: The time value of money is a concept in finance that evaluates the worth of cash flows at any given…

Q: per year and the cash value is expected to be $1.5 million at retirement. Approximately how many…

A: The given problem can be solved using NPER function in excel. NPER function computes no. of years/…

Q: You annually invest $1,500 in an individual retirement account (IRA) starting at the age of 25 and…

A: Your annual investment, PMT = $ 1,500    Starting age = 25Number of Years, n = 15Annual Interest…

Q: Your uncle gives you $92,000 as a gift. Rather than give you a lump-sum, your uncle structures the…

A: Giftable amount (PV) is $92000 Annunity per year (PMT) is $16,250 Interest rate is 12% To Find:…

Q: A self-employed person deposits $2,000 annually in a retirement account (called a Keogh or H.R. 10…

A: The value of current asset for the future date based on the growing interest will be known as the…

Q: Solve the following problems. Show your solutions on a separate sheet of paper. 1. Your father is…

A: Since you have asked multiple questions, we will solve the first question for you. If you want any…

Q: Mike joins a savings program where he deposits $1000 at the begint he will earn a perpetuity paying…

A: Here,

Q: Craig decides to purchase a property that has been valued at $475,000. He has $80,000 available as a…

A: Value of property = $475,000Available deposit = 80,000Mortgage year = 25 yearsInterest = 2%

Q: You contribute $1,000 annually to a retirement account for eleven years and stop making payments at…

A: Withdrawal using present value (PV) of funds at retirement refers to the strategy of calculating the…

Q: Your employer contributes $75 a week to your retirement plan. Assume that you work for your employer…

A: Weekly contribution (C) = 75Weekly discount rate (r) = 0.00144 (i.e. 0.075 / 52)Weekly period of…

Q: You contribute $1,000 annually to a retirement account for seven years and stop making payments at…

A: Using excel FV function

Q: how much money must be removed from the estate to purchase the annuity?

A: ==> The amount required on the child's 18th birthday to fund the annuity is calculated using PV…

Q: Rachel starts an IRA (Individual Retirement Account) at the age of 26 to save for retirement. She…

A: Compound interest is a financial concept that involves the addition of interest not just on the…

Q: When Jasmine retires she has $950,000 in a retirement account that earns 6% annual interest,…

A: Using PMT function in excel

Q: Shane has a retirement plan with an insurance company. He can choose to be paid either $450 per…

A: Solution:- Every rational person wants to pay fewer amounts. So, the better option will be the one…

Q: r. Bearer may choose to take a lump-sum payment of $25,292.8 now from his insurance policy or an…

A: Annuity is the series of equal payments that are made at regular intervals and payments are uniform…

Q: As the beneficiary of a life insurance policy, you have two options for receiving the insurance…

A: The question is based on the concept of annuity in Financial Management. Annuity refers to the…

Q: A 40-year-old woman decides to put funds into a retirement plan. She can save $1,000 a year and earn…

A: We need to calculate the persent value of annuity  by using this formula.    PV of annuity =CF*…

Q: you want to establish a perpetuity that pays $6500 per year. Your banker will establish such an…

A: Solution:Perpetuity refers to the equal cash flow per period forever.We know, value of perpetuity =…

Q: You estimate you need to supplement your social security payments with monthly withdrawals of…

A: Given: Monthly withdrawal = $3,420 Interest rate = 6.9% So, monthly interest rate = 0.069/12 = 0.58%…

Q: You decide to deposit $190 each month into the retirement fund, and retire when you can afford to…

A: The question requires finding out the number of payments in terms of the month when future value,…

Q: Sharon has worked for a company with a retirement program, and today is retiring from her job with…

A: We need to use annuity due formula to calculate annual payment of…