A 3-year term insurance policy has an annual premium of $300, and at the end of 3 years, all payments and interest are refunded. What lump-sum deposit is necessary to equal this amount if you assume an interest rate of 4.5% compounded annually? (a) State the type. O sinking fund O present value of an annuity O amortization O future value O ordinary annuity (b) Answer the question. (Round your answer to the nearest cent.)

A 3-year term insurance policy has an annual premium of $300, and at the end of 3 years, all payments and interest are refunded. What lump-sum deposit is necessary to equal this amount if you assume an interest rate of 4.5% compounded annually? (a) State the type. O sinking fund O present value of an annuity O amortization O future value O ordinary annuity (b) Answer the question. (Round your answer to the nearest cent.)

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter11: Capital Budgeting Decisions

Section: Chapter Questions

Problem 6MC: You want to invest $8,000 at an annual Interest rate of 8% that compounds annually for 12 years....

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