As a settlement for an insurance claim, Craig was offered one of two choices. He could either accept a lump-sum amount of $2148 now, or accept quarterly payments of $125 for the next five years. If the money is placed into a trust fund earning 3.24% compounded annually, which is the better option and by how much?
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- As a settlement for an insurance claim, Craig was offered one of two choices. He could either accept a lump-sum amount of $2207 now, or accept quarterly payments of $143 for the next five years. If the money is placed into a trust fund earning 4.71% compounded annually, which is the better option and by how much?As a settlement for an insurance claim, Craig was offered one of two choices. He could either accept a lump-sum amount of $11,235 now, or accept monthly payments of $140 for the next nine years. If the money is placed into a trust fund earning 7.64% compounded annually, which is the better option and by how much?As a settlement for an insurance claim, Craig was offered one of two choices. He could either accept a lump-sum amount of $4635 now, or accept quarterly payments of $194 for the next eight years. If the money is placed into a trust fund earning 6.18% compounded semi-annually, which is the better option and by how much? The option is better by $ (Rou est cent as needed. Round all intermediate values to six decimal places as needed.) lump sum quarterly payments
- Gustav desires to deposit with a Trust Company a sum just sufficient to provide his family with an annuity of $600 per month for twenty-four years. How much he deposit if the Trust Company agrees to accumulate interest at the rate of 6% payable monthly? show solutionYou 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 $400,000 today or receive payments of $16,000 a year for 15 years. You can earn 6 percent on your money. Which option should you take and why?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 $200,000 today or receive payments of $1,400 a month for 20 years. You can earn 6 percent on your money. Which option should you take and why?
- Del Monty will receive the following payments at the end of the next three years: $20,000, $23,000, and $25,00O. Then from the end of the 4th year through the end of the 10th year, he will receive an annuity of $26,000 per year. At a discount rate of 10 percent, what is the present value of all three future benefits? Use Appendix B and Appendix D for an approximate answer, but calculate your final answer using the formula and financial calculator methods. (Do not round intermediate calculations. Round your final answer to 2 decimal places.) Present value of all future benefitsMrs. Crawford will receive $9,250 a year for the next 14 years from her trust. Use Appendix D for an approximate answer, but calculate your final answer using the formula and financial calculator methods.If a 8 percent interest rate is applied, what is the current value of the future payments? (Do not round intermediate calculations. Round your final answer to 2 decimal places.)You wish to retire after 22 years; at which time you want to have accumulated enough money to receive an annuity of $68,000 a year for 25 years of retirement. During the period before retirement, you can earn 6 percent annually, while after retirement you can earn 4 percent on your money. What annual contribution to the retirement fund will allow you to receive the $68,000 annually?
- A policyholder wishes to annuitize the cash value of her insurance policy at retirement. She desires an annual payment of $97.8,000 per year and the cash value is expected to be $1.5 million at retirement. Approximately how many payments can she expect to receive if annuity interest rates are 5.739 percent? (Do not round intermediate calculations. Round your answer to a whole number.)The Good Fairy has offered to give you $1,000,000 in 20 years. She has volunteered to deposit the present value of the $1,000,000 in a trust managed by a bank or insurance company of your choice. How much must the Good Fairy deposit if the investment earns annual compounding interest of 5 percent?Your uncle named you beneficiary of his life insurance policy. The insurance companygives you a choice of $100,000 today or a 12-year annuity of $12,000 at the endof each year. What rate of return is the insurance company offering? (6.11%)