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Posted by: Homeworkhelp
Price Quoted by Student: $7
Posted On: 2016-05-27 01:01:06
 
Question
P6-5 Julia Baker died, leaving to her husband Brent an insurance policy contract that provides that the beneficiary (Brent) can choose any one of the following four options.
(a)  $55,000 immediate cash.

(b) $4,000 every 3 months payable at the end of each quarter for 5 years.
(c) $18,000 immediate cash and $1,800 every 3 months for 10 years, payable at the beginning of each 3-month period.
(d)  $4,000 every 3 months for 3 years and $1,500 each quarter for the following 25 quarters, all payments payable at the end of each quarter.

Instructions

If money is worth 2% per quarter, compounded quarterly, which option would you recommend that Brent exercise?

TUTORIAL PREVIEW
(b)        Time diagram:
i = 21/2% per quarter
                    PV OA =      R =

Solutions
Please see the attachment for solution
Price $7
Attachment 1: P6-5 Julia Baker died.docx
Solution Posted By: Homeworkhelp    Posted on: 27-05-2016