Expert Solution

(a)

To determine

To calculate: The value of Mary’s option 1 if she purchased a $45,000 20-Year endowment life insurance policy at the age of 20 years and her current age is 35 years. ### Explanation of Solution Given Information: Mary Hall purchased a$45,000 20-Year endowment life insurance policy at the age of 20 years and her current age is 35 years.

Formula used:

Steps to calculate the value of NONFORFEITURE option 1-cash value,

Step 1: Divide the face value of policy by $1,000 to calculate the number of$1,000 of insurance desired. And round to the nearest whole $1,000. Number of$1,000=Face value of policy$1,000 Step 2: From the table 19-3 locate the appropriate dollars per$1,000 in cash value column.

Step 3: Multiply the figure from step 2 with the number of $1,000 of insurance. Calculation: Consider the provided data, The policy is a 20-Year endowment life insurance policy with a face value of$45,000

Expert Solution

(b)

To determine

To calculate: The value of Mary’s option 2 if she purchased a $45,000 20-Year endowment life insurance policy at the age of 20 years and her current age is 35 years. Expert Solution (c) To determine The value of Mary’s option 3 if she purchased a$45,000 20-Year endowment life insurance policy at the age of 20 years and her current age is 35 years.

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