Question: Today is January 1,2022 . Roy will use a single premium to purchase an annuity today. This annuity pays $10,000 at the end of each

Today is January 1,2022 . Roy will use a single premium

Today is January 1,2022 . Roy will use a single premium to purchase an annuity today. This annuity pays $10,000 at the end of each year while Roy is alive. The estimated probability of Roy surviving for the next 4 years is stated in following table. The yield rate is assumed to be j1=14.7% p.a. Calculate the premium value. Round your answer to three decimal places. a. $14996.232 b. $15506.127 c. $20400.000 d. $16182.247

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!

Q:

A radiant oven for drying newsprint consists of a long duct (L = 20 m) of semicircular cross section. The newsprint moves through the oven on a conveyor belt at a velocity of V = 0.2 m/s. The...

Q:

Today is 1 July, 2022, Georg plans to purchase a corporate bond with a coupon rate of j 2 = 2.18% p.a. and a face value of $100. This corporate bond matures at par. Its maturity date is 1 January,...

Q:

Today is January 1, 2022. Roy will use a single premium to purchase an annuity today. This annuity pays $10,000 at the end of each year while Roy is alive. The estimated probability of Roy surviving...

Q:

Today is January 1, 2022. Roy will use a single premium to purchase an annuity today. This annuity pays $10,000 at the end of each year while Roy is alive. The estimated probability of Roy surviving...

Q:

Lydia just purchased a Treasury bond for $90 at a yield rate of j2=1.06% p.a. The duration of Lydia's bond is 3.7552 years. Using the bond price sensitivity formula, calculate the change in price of...

Q:

1. Today is January 1, 2022. Roy will use a single premium to purchase an annuity today. This annuity pays $10,000 at the end of each year while Roy is alive. The estimated probability of Roy...

Q:

Today is January 1, 2022. Roy will use a single premium to purchase an annuity today. This annuity pays $10,000 at the end of each year while Roy is alive. The estimated probability of Roy surviving...

Q:

Today is January 1, 2022. Roy will use a single premium to purchase an annuity today. This annuity pays $10,000 at the end of each year while Roy is alive. The estimated probability of Roy surviving...

Q:

Today is January 1, 2022. Roy will use a single premium to purchase an annuity today. This annuity pays $10,000 at the end of each year while Roy is alive. The estimated probability of Roy surviving...

Q:

4. Today is January 1, 2022. Roy will use a single premium to purchase an annuity today. This annuity pays $10,000 at the end of each year while Roy is alive. The estimated probability of Roy...

Q:

Question 7 Not yet saved Marked out of 2.00 Today is January 1, 2022. Roy will use a single premium to purchase an annuity today. This annuity pays $10,000 at the end of each year while Roy is alive....

Q:

Your clients, a married couple, are Presbyterian missionaries in Ukraine. They are both children of missionaries; the husband was born in Poland and the wife in the Philippines, but both acquired...

Q:

In the CASA teen survey described in the previous exercise, 33% of teens reported that parents are never present at parties they attend. Thirty-one percent of teens who say parents are never present...

Q:

The formula for determining the required rate of return on a company's stock using the capital asset pricing model ( CAPM ) , Is Expected return = Expected Riskfree rate x ( expected Market rate -...

Q:

Add "Viggo Mortenslet cast = new Map ( ) ;en " to the cast as the key, with value "Aragorn".