Delayed Annuity (SDT) Christina is planning on buying an insurance policy that will pay for $180,500 a year for 25-years, with the first payment occurring in 15 years, if she is still alive, otherwise the policy will payout a lump sum to her heirs at the end of year 14. The rate of return on the policy is6.25 percent? What is the value of the lump payout? If Christina purchases the policy, what is the maximum she is willing to pay?
Delayed Annuity (SDT) Christina is planning on buying an insurance policy that will pay for $180,500 a year for 25-years, with the first payment occurring in 15 years, if she is still alive, otherwise the policy will payout a lump sum to her heirs at the end of year 14. The rate of return on the policy is6.25 percent? What is the value of the lump payout? If Christina purchases the policy, what is the maximum she is willing to pay?
Financial Accounting Intro Concepts Meth/Uses
14th Edition
ISBN:9781285595047
Author:Weil
Publisher:Weil
ChapterA: Appendix - Time Value Of Cash Flows: Compound Interest Concepts And Applications
Section: Chapter Questions
Problem 13E
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