6. On January 1, an insurance company has 100,000 which is due to Linden as a...
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6. On January 1, an insurance company has 100,000 which is due to Linden as a life insurance death benefit. He chooses to receive the benefit annually over a period of 15 years with the first payment immediately. The benefit he receives is based on an annual effective interest rate of 4%. The insurance company earns interest at an annual effective rate of 5%. Every July 1, the company pays 100 in expenses and taxes to maintain the policy. At the end of nine years, the company has X remaining. Calculate X. 6. On January 1, an insurance company has 100,000 which is due to Linden as a life insurance death benefit. He chooses to receive the benefit annually over a period of 15 years with the first payment immediately. The benefit he receives is based on an annual effective interest rate of 4%. The insurance company earns interest at an annual effective rate of 5%. Every July 1, the company pays 100 in expenses and taxes to maintain the policy. At the end of nine years, the company has X remaining. Calculate X.
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Since payment has to be spread over 15 years with first payment happening immediately we will assume ... View the full answer
Related Book For
Introduction to Operations and Supply Chain Management
ISBN: 978-0132747325
3rd edition
Authors: Cecil B. Bozarth, Robert B. Handfield
Posted Date:
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