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.
1. Which option should you take and why?
A. You should accept the payments because they are worth $209,414 to you today. B. You should accept the payments because they are worth $247,800 to you today. C. You should accept the payments because they are worth $336,000 to you today. D. You should accept the $200,000 because the payments are only worth $189,311 to you today. E. You should accept the $200,000 because the payments are only worth $195,413 to you today.
Answers (1)
Know the Answer?
Not Sure About the Answer?
Get an answer to your question ✅ “You are the beneficiary of a life insurance policy. The insurance company informs you that you have two options for receiving the insurance ...” in 📙 Business if there is no answer or all answers are wrong, use a search bar and try to find the answer among similar questions.
Search for Other Answers
You Might be Interested in
Which of the following is a capital resource? a. A computer programmer. b. A corporate bond issued by a computer manufacturer. c. Silicon (sand) used to make computer chips. d. A piece of software used by a firm.
Answers (1)
Presented below are selected account balances for Blue Co. as of December 31, 2020. Inventory 12/31/20 $60,260 Cost of Goods Sold $223,793 Common Stock 73,760 Selling Expenses 15,746 Retained Earnings 45,260 Administrative Expenses 38,647 Dividends
Answers (1)
What are the differences between gateway's distribution model prior to 2004 and apple's distribution model?
Answers (1)
Which of the following about associate's degrees are true? a. You may transfer part or all of your associate's degree courses to a bachelor's degree program b. Associate's degree programs are part-time only c.
Answers (2)
Samba's responses to madame upon learning he will be hired back in two and a half months are
Answers (1)
New Questions in Business
Property taxes and fines represent which of the following classes of nonexchange transactions for government units? Group of answer choices Government-mandated nonexchange transactions.
Answers (1)
You want to go to Europe 5 years from now, and you can save $3,100 per year, beginning one year from today. You plan to deposit the funds in a mutual fund which you expect to return 8.5% per year.
Answers (1)
Pacific Packaging's ROE last year was only 6%; but its management has developed a new operating plan that calls for a debt-to-capital ratio of 40%, which will result in annual interest charges of $336,000.
Answers (1)
Joe has $100,000 in an investment account. He is looking to retire in 12 years. He needs a minimum of $240,000 in order to retire. What rate of return does Joe need to make on his investment in order to be able to retire?
Answers (1)
Toombs Media Corp. recently completed a 3-for-1 stock split. Prior to the split, its stock sold for $160 per share. The firm's total market value was unchanged by the split.
Answers (1)