An insurance company gives an endowment policy for a person aged 30 years. The yearly premium...
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An insurance company gives an endowment policy for a person aged 30 years. The yearly premium for an insured sum of Rs. 1,00,000 is Rs. 4,000. The policy will mature after 25 years. Also, the person is entitled for a bonus of Rs. 75 per thousand per year at the end of the policy. If a person survives till the end of the 25th year: (a) What will be the total sum that he will get from the insurance company at that time? (b) Instead of paying the premiums for the insurance policy, if the person invests an equal sum of Rs. 4,000 at the end of each year for the next 25 years in some other scheme which is having similar tax benefit, find the future worth of the investment at 15% interest rate, compounded annually. (c) Rate the above alternatives assuming that the person is sure of living for the next 25 years. An insurance company gives an endowment policy for a person aged 30 years. The yearly premium for an insured sum of Rs. 1,00,000 is Rs. 4,000. The policy will mature after 25 years. Also, the person is entitled for a bonus of Rs. 75 per thousand per year at the end of the policy. If a person survives till the end of the 25th year: (a) What will be the total sum that he will get from the insurance company at that time? (b) Instead of paying the premiums for the insurance policy, if the person invests an equal sum of Rs. 4,000 at the end of each year for the next 25 years in some other scheme which is having similar tax benefit, find the future worth of the investment at 15% interest rate, compounded annually. (c) Rate the above alternatives assuming that the person is sure of living for the next 25 years.
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To ascertain the absolute aggregate that the individual will get from the insurance agency toward the finish of the 25th year we want to think about t... View the full answer
Related Book For
Income Tax Fundamentals 2013
ISBN: 9781285586618
31st Edition
Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill
Posted Date:
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