Answered: Calculate the annual premium for a 20…

Business

Finance

Calculate the annual premium for a 20 year old male seeking 5 year term insurance valued at $120,000.

Financial Accounting Intro Concepts Meth/Uses

14th Edition

ISBN:9781285595047

Author:Weil

Publisher:Weil

ChapterA: Appendix - Time Value Of Cash Flows: Compound Interest Concepts And Applications

Section: Chapter Questions

Problem 13E

See similar textbooks

Related questions

Q: Kenji wants to buy a $150,000 term life insurance policy. He is 30 years old. Using the premium…

A: We can use the provided table to determine the amount that Kenji will have to pay as premium.

Q: Consider a person who begins contributing to a retirement plan at age 25 and contributes for 40…

A: Calculate Value of the amount at age of 65 as below: Resultant table: Hence, plan has value of…

Q: Marwan, aged 30, male, purchased an insurance policy from National Life Insurance with a face value…

A: Following is the answer to the given question

Q: ane will retire in 30 years. This year he wants to deposit an amount of €150,000 to become available…

A: The future value of today amount depends on the interest rate and period of deposit. The future…

Q: Assume that a pension plan offers to pay $500,000 on a person's retirement (his/her sixty-fifth…

A: Thanks for your question. As per the guidelines, if there are multiple questions, we are allowed to…

Q: Meg's pension plan is an annuity with a guaranteed return of 4% per year (compounded quarterly). She…

A: Given data; rate of interest = 4% payment after retirement= $20,000 number of years after retirement…

Q: Mr. Kamal is one the insured in Al-Ahlia Insurance Company having a policy of 10-year fixed rate…

A: Insurance can be defined as the arrangement being made by the individual or the company against the…

Q: Suppose your mother has worked for 40 years and has accumulated $1,000,000. She wishes to begin…

A: The present value of the amount represents the current value of the future cash flows. The…

Q: A person joins a pension plan at age 35. How much will she have to pay into the pension fund each…

A: The question is based on the concept of Annuity in Financial Management.

Q: An engineer planning for retirement decides that she wants to have income of $100,000 per year for…

A: Given information: Annual income of $100,000 for 20 years First withdrawal is beginning 30 years…

Q: Marwa, aged 35, female, purchased an insurance policy from Oman United Insurance with a face value…

A: Marwa aged 35 female purchased insurance policy of RO 22,000 RAte used as per the table = 1.76

Q: 1.A father is investing 1000 t, every 6 months into a life insurance account for his son. According…

A: Using Future value in excel

Q: To prepare for his retirement in 13 years, Tekla deposited 10,000 in an account paying 9%. Nine…

A: “Since you have asked multiple questions, we will solve the first question for you. If you want any…

Q: AXA Insurance company sells life insurance policies for 5 years for 25 year old man. The amount…

A: Present value refers to the current value of expected income in the future at a given discounted…

Q: By the end of this year, you would be 35 years old and you want to plan for your retirement. You…

A: Given information: The annuity sum required after 30 years for 20 years is $50,000, The annual…

Q: Your uncle named you beneficiary of his life insurance policy. The insurance company gives you a…

A: Using excel rate function to calculate rate of annuity

Q: How many dollars would be the retirement pension if the person at the age of 65 wants to change…

A: Retirement planning is about forming plans in order to accomplish retirement expenses and retirement…

Q: Determine the present value of future contributions to a pension plan for a person aged 35, earning…

A: In the below table, the earnings has been increased by 3% every year from Year1 onwards and 5%…

Q: unt and use the funds to buy an investment grade bond which makes $50,000 annual coupon payments…

A: Given as, Annuity sum required after 30 years for 20 year is $50,000 Annual coupon rate is 6%…

Q: A recent college graduate hopes to have 200,000 saved in their retirement account 25 years from now…

A: Here, Future value (FV) = 200,000 Number of years = 25 years Contribution per month = 150 Interest…

Q: You estimate you need to supplement your social security payments with monthly withdrawals of…

A: The question is based on the concept present value of annuity payment Formula as, Pv=pmt*1-(1+r)-nr

Q: You are the beneficiary of a life insurance policy. The insurance company informs you that you have…

A: The value of money changes with time. Therefore, the time value of money considers the value of…

Q: A retired couple plans to supplement their retirement income with monthly withdrawals of the…

A: In this question, the retired couple plans their income if they have a balance of 200000 in the…

Q: a 30-year-old female (a) a 20-year fixed rate policy and (b) a straight life policy. F) Estimate the…

A: E Given, Face Value - $125000 Age - 30 year Term - 20 year Fixed rate policy N= 12*20 = 240 months…

Q: Tina Parker, a single mother, is 20 years old. She has called on you for an insurance consultation.…

A: Expenses- Expenses refers to the reduction in the value of owner's equity and opposite of revenue.…

Q: Use the given table. Parker's $250,000 whole-life insurance policy has a cash value of $11,286.…

A: Estimate the number of years of extended term insurance by referring to Tobacco rate @ 10 year level…

Q: what is her payment?

A: Information Provided: Term = 20 years Present value = $1,000,000 Interest rate = 5% Ordinary…

Q: Consider a whole life insurance with annual premiums and a 20-year premium paying term issued to a…

A: A loss function includes the present value of the future benefits paid by the company and the…

Q: Solve the following problems: a. Give the discount of ₱ 750 for 15 years at 7% compounded monthly.…

A: Present value is today's value of a future amount. It is the discounted cash flow and is computed as…

Q: man age 20 agrees to pay a life insurance company RM1200 at the end of each y ng as he lives. Using…

A: Present value of perpetuity can be calculated from the annual payment and value of interest rate.

Q: Abeer, aged 30, female, purchased an insurance policy from National Life Insurance with a face value…

A: Given, Female Age = 30 Annual Premium Factor from table = 1.56 So, Annual premium for 26000 RO =…

Q: 1.A father is investing 1000 E, every 6 months into a life insurance account for his son. According…

A: The future value of the annuity is the total value of all the payments which is occurred regularly…

Q: Abeer, aged 30, female, purchased an insurance policy from National Life Insurance with a face value…

A: Following is the answer to the given question

Q: You are the beneficiary of a life insurance policy. The insurance company informs you that you have…

A: A study that proves that the future worth of the money is lower than its current value due to…

Q: You annually invest $1,500 in an individual retirement account (IRA) starting at the age of 30 and…

Q: A self-employed person deposits $3,000 annually in a retirement account (called a Keogh or H.R. 10…

A: Amount deposited annually in a retirement account, A = $ 3,000Since this is deposited every year,…

Q: If a life insurance company insures 50 females age 25 for $40,000, 10- year term policies, how much…

A: The annuity payment formula is used to calculate the periodic payment on an annuity. An annuity is a…

Q: Assume that a pension plan offers to pay $500,000 on a person's retirement (his/her sixty-fifth…

A: Annuity: It is a payment made in series at equal intervals.

Q: Tina Parker, a single mother, is 20 years old. She has called on you for an insurance consultation.…

A: Insurance is a contract between insurer and insured where insure agrees to compensate insured for…

Q: Meg's pension plan is an annuity with a guaranteed return of 5% per year (compounded quarterly). She…

A: Here, The present value of an annuity is 'PV' An annuity is 'A' Interest rate is 'r' Number of the…

Q: Express the net single premium (NSP) for a life insurance policy providing a $500,000 death benefit…

A: Since the benefit policy is divided into two First in 500000 for 15 years and then 1000000 for the…

Q: Aisha, aged 25 years, female, purchased an insurance policy from Dhofar Insurance with a face value…

A: Annual Premium = Applicable Premium Rate x Face Value

Q: Grandparents plan to open an account on their grandchild's birthday and contribute each month until…

A: A theory that helps to compute the present or future value of the cash flows is term as the TVM…

Q: If a life insurance company insures 50 females age 25 for $40,000, 10- year term policies, how much…

A: The annuity payment formula is used to calculate the periodic payment on an annuity. An annuity is a…

Q: A person joins a pension plan at age 40 (40th birthday). How much will s/he have to pay into the…

A: A concept that implies the future worth of the money is lower than its current value due to several…

Q: Your rich uncle named you beneficiary of his life insurance policy. The insurance company gives you…

A: Amount today = 100,000 Annual payment = P12,000 Period = 12 Years

Q: Reba Mc Entire wishes to invest $19, 000 on July 1, 2011, and have it accumulate to $49, 000 by July…

A: In the given question we require to calculate the annual rate of interest at which Reba invest its…

Concept explainers

Property Insurance

Property insurance protects property from unforeseeable loss or damage and covers property owners' liability. Property insurance provides financial compensation to the property owner or renter in the event of damage or theft, as well as to someone other than the owner or renter if that person is injured on the property. Property insurance covers all risks of damage caused by theft, fire, flood, cyclones, lighting, and natural calamities, among other things. The primary goal of property insurance is to require the property owner to cover the loss. A monthly premium is paid to the insurance company, and in exchange, the insurance company pays for damage based on the agreement stated in the policy. Property insurance protects assets such as a vehicle, auto, car, rental home, house, and valuable property.

Question

Calculate the annual premium for a 20 year old male seeking 5 year term insurance valued at $120,000.

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.

Similar questions

If a life insurance company insures 50 females age 25 for $40,000, 10- year term policies, how much would they expect to pay out?Solve
A policyholder wishes to receive $5,000 per month in retirement. They plan to retire at the age of 64, the insurer is guaranteeing a 4% rate of return, and their life expectancy is 86. If they deposit each of the following amounts annually before retiring, at what age do they need to start saving? (A).$10,000 25 years old (technically, 25.60759 years old) (B).$15,000 33 years old (technically, 33.26361 years old) (C).$20,000 38 years old (technically, 38.17201 years old) (D).$25,000 41 years old (technically, 41.64589 years old)
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?
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 $400,000 today or receive payments of $16,000 a year for 15 years. You can earn 6 percent on your money. Which option should you take and why?
Darlene wants to buy a $200,000 term life insurance policy. She is 34 years old. Using the premium table, what is her annual premium for a 10-year policy? a $100 b. $108 C$1.202 d. $1.290
Kenji wants to buy a $150,000 term life insurance policy. He is 30 years old. Using the premium table, what is his annual premium for a 5-year policy?
you are 47 and have a 270,000 face amount 13-year limited payment participating policy. Your annual premium is 945. The cash value of the policy is expected to be 10,813 years using the time value of money and assuming you can invest your money elsewhere for a 6% annual yield, calculate the net cost of insurance.
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 $50,000 today or receive payments of $641 a month for 10 years. You can earn 6.50% on your money. What option should you take and why?
A medical doctor, 48 years old, is enrolled in a pension fund that will pay he $6,000 monthly at retirement age 60. This fixed monthly pension payout will be for a period of 25 years. The doctor requires a 6%)annual return on her investments. The present value of this annuity today is closest to: A- $462798 B. $469.858 C- $945447
If an insurance company sells a 150,000 life insurance policy for 600 premium per year and the probability of living out the year is .9965, what is the expected value to the insurance company
If a nurse invests $6,000 at the end of each year in her retirement account at 5% annual rate of return, what would her retirement account be worth if she retires in: (use spreadsheet)a. 20 yearsb. 30 yearsc. 35 yearsd. What if she deposits the $6,000 at the beginning of each year for 25 years?
You plan to open a retirement account. Your employer will match 50% of your deposits up to a limit on the match of $2,500 per year. You believe the fund will earn 12% over the next 30 years, and you will make 30 deposits of $5,000, plus 50% employer matching, totaling $7,500 per year.