Determine the maturity value of this policy

Reference no: EM132177314

Question - CASE: Melvyn has a 20-year policy at Old Mutual. His monthly premium initially was R500 escalating at the start of every year by 8%. Assume that the illustrated growth of the policy was 6% pa. compounded monthly. His first monthly premium was on January 31, 1999

1. How much is his monthly premium now? Assume that it is August 31, 2018 today.

2. Determine the worth of that policy now, August 31, 2018.

3. Determine the maturity value of this policy at the end of the 20 years.

4. Determine the total interest earned on this policy for the entire term.

Reference no: EM132177314

Questions Cloud

What difficulties emerge in the given situation : If financial capital is relatively mobile between countries, what difficulties emerge if the various countries have different interest rate targets.

Write down one idea discussed in the interview : Write down one idea discussed in the interview that you found new or interesting, or that you disagree with, and briefly explain why.

What general slope would you expect for the curve : Suppose you were instructed to construct a BP curve of one state in the United States with another, such as New York's BP curve with Illinois.

Does perfect price discrimination always result : Does perfect price discrimination always result in zero consumer surplus and the same aggregate surplus as in a competitive market equilibrium? Or is this not a

Determine the maturity value of this policy : Assume that the illustrated growth of the policy was 6% pa. compounded monthly. Determine the worth of that policy now, August 31, 2018

Why devaluing domestic currency have expansionary effect : Why does devaluing the domestic currency have an expansionary effect on the economy? Does this expansionary effect take place if capital is perfectly immobile?

Blockaded entry to deterable entry : "All else equal, a firm would prefer blockaded entry to deterable entry." Explain.

What will happen to the relative holdings of foreign assets : What will happen to the relative holdings of foreign and domestic assets by the home country if there is an increase in the money supply and capital.

Systematic relationship between concentration and price : What is this relationship? Offer two brief explanations for this relationship.

User Account

All Pages