Select best option in insurance policy

Assignment Help Finance Basics

Reference no: EM1349783

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. Which option should you take and why?

Question options:

1) You should accept the payments because they are worth $336,000 to you today.
2) You should accept the $200,000 because the payments are only worth $195,413 to you today.
3) You should accept the $200,000 because the payments are only worth $189,311 to you today.
4) You should accept the payments because they are worth $209,414 to you today.
5) You should accept the payments because they are worth $247,800 to you today.

Reference no: EM1349783

Questions Cloud

Creating a software package for amazon : Suppose you are creating a software package for Amazon.com that needs users to enter their own passwords. Your software requires that users' passwords meet the following criteria:The password should be at least six characters long.

What conditions will an increase in the price of product : In what conditions will an increase in the price of a product lead to a reduction in total spending for that production.

Compute the equilibrium level of national income : Solve for aggregate expenditures (AE) as a function of Y, and compute the equilibrium level of national income. Elucidate your equilibrium in a diagram with AE.

How many time constants must elapse for uncharged capacitor : A sanding disk with rotational inertia 5.4 x 10-3 kg·m2 is linked to an electric drill whose motor delivers a torque of magnitude 10 N·m about the central axis of the disk. About that axis and with torque applied for 72 ms, what is the magnitude o..

Select best option in insurance policy : You are the beneficiary of a life insurance policy. The insurance firm informs you that you have two options for receiving the insurance proceeds.

Explain team group conflict : After doing some research on the topic of conflict, propose to your peers a position, and discuss the concept of conflict in teams.

Guidelines from the apa code of conduct : Select one guideline from the state of Maryland and one from the APA Code of Conduct or two guidelines from the APA Code of Conduct.

Explain planning is everything : Explain PLANNING IS EVERYTHING and How can IMC principles move us up the pyramid

Benefits of group or team conflict : How is it possible to differentiate the positive from the negative types of conflict within a group or team environment?

User Account

All Pages