Calculate the cash surrender value for Lee Chin, age 43, who purchased a $340,000 20-year endowment policy. At the end of year 10, Lee stopped paying premiums. (Use Table 20 2) Cash surrender value
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- Calculate the reduced pald-up insurance for Lee Chin, age 41, who purchased a $310,000 20-year endowment policy. At the end of year 5, Lee stopped paying premiums. (Use Table 20.2.) Reduced paid-up insurance TABLE 20-2 Nonforfelturo options based on $1,000 face value STRAIGHT LIFE 20-PAYMENT LIFE 20-YEAR ENDOWMENT EXTENDED TERM Years EXTENDED EXTENDED Insurance Amount of TERM Amount of TERM Amount of pollcy in force Cash value Cash paid-up Insurance pald-up Cash pald-up Years Day value Insurance Years Day value Insurance Years Day 29 86 9. 91 71 220 19 190 92 229 23 140 10 96 259 18 76 186 621 28 195 319 520 30 160 15 148 371 20 165 317 781 32 176 610 790 35 300 20 265 550 21 300 475 1,000 Life 1,000 1,000 Life Option 1: Cash value $200.000 $1.000 Option 2: Reduced paid-up insurance $200.000 $1.000 Option 3: Extended term insurance 200 x$148 $29.600 200 x $371$74.200 Bob could continue this $200.000 polcy for 20 years and 165 daysComprehensive The following are three independent situations: 1. K. Herrmann has decided to set up a scholarship fund for students. She is willing to deposit 5,000 in a trust fund at the end of each year for 10 years. She wants the trust fund to then pay annual scholarships at the end of each year for 30 years. 2. Charles Jordy is planning to save for his retirement. He has decided that he can save 3,000 at the end of each year for the next 10 years, 5,000 at the end of each year for Years 11 through 20, and 10,000 at the end of each year for Years 21 through 30. 3. Patricia Karpas has 200,000 in savings on the day she retires. She intends to spend 2,000 per month traveling around the world for the next 2 years, during which time her savings will earn 18%, compounded monthly. For the next 5 years, she intends to spend 6,000 every 6 months, during which time her savings will earn 12%, compounded semiannually. For the rest of her life expectancy of 15 years, she wants an annuity to cover her living costs. During this period, her savings will earn 10% compounded annually. Assume that all payments occur at the end of each period. Required: 1. In Situation 1, how much will the annual scholarships be if the fund can earn 6%? How much at 10%? 2. In Situation 2, (a) How much will Charles have at the end of 30 years if his savings can earn 10%? How much at 6%? (b) If Charles expects to live for 20 years in retirement, how much can he withdraw from his savings at the end of each year if his savings earn 10%? How much at 6%? (c) How much would Charles need to invest today to have the same amount available at the time he retires as calculated in Situation 2(a) at 10%? How much at 6%? 3. In Situation 3, how much will Patricias annuity be?MENU = a. Your grandmother left you an inheritance in the form of a trust. The trust agreement states that you are to receive R2 500 on the first day of each year, starting immediately and continuing for fifty years. What is the value of this inheritance today if the applicable discount rate is 6,20%? O b. III d. R66 811,30 R40 706,92 O C.R39 942,42 myExams R49 942,42
- Allen has purchased a whole life policy with a death benefit of $100,000. Assuming that he dies in 9 years and the average inflation has been 3 percent, what is the value of the purchasing power of the proceeds? Use (Exhibit 1-A, Exhibit 1-B, Exhibit 1-C, Exhibit 1-D) Note: Use appropriate factor(s) from the tables provided. Round time value factor to 3 decimal places and final answer to 2 decimal places. Purchasing power of proceedsRecord the following annuity and life income activities of Private University:1. On July 1, 2010, R. W. Fields, emeritus professor of accounting, moved out of the state. Fields donated to the university common stock with a cost basis of $30,000 and a fair value of $90,000. Fields is to receive an annuity of $6,000 each year for life; at death, the securities are to be sold and the remaining cash balance is to be transferred to the student loan fund. At a 10% annual rate and a life expectancy of 12 years, the present value of the annuity payments is $34,068.2. The stock paid $3,400 in dividends each 12-month period.3. The annuities payable account is adjusted to present value. At year-end, a payment of $6,000 is made to Professor Fields.4. The annuities payable account is adjusted to present value. A second payment was made a year later.5. A month later, Professor Fields died, eliminating the liability for future annuity payments.6. The common stock was sold for $97,000. The cash…Several years ago. Iris Company purchased a P3,000,000 ordinary life insurance policy on its president and the company is the named beneficiary. Additional data are available for the year ended December 31, 2020.Cash surrender value of life insurance, December 31, 2020 - 117,000 Annual premium paid in advance on January 1, 2020 - 50,000 Life insurance expense recognized in the statement of comprehensive income for the year ended December 31, 2020 - 38,000How much must have been the cash surrender value of life insurance at Iris's December 31. 2020 financial statements? A.12,000 B. 117,000 C. 129,000 D. 105,000
- Cash Surrender Value: ABC Corp is covering for the life insurance of its chairman emeritus. The insurance had the details as shown in the posted material. The chairman died on July 31, 2024. ABC received a total sum of P1,200,000 from the insurance on Sept. 1, 2024. Compute for the following: a.Life insurance expense – 2021 b.Life insurance expense – 2024 c. Gain on life insurance settlement4. A select life aged 60 purchases a 10-year endowment insurance with $100,000 sum insured. Premiums are payable annually in advance and death benefits are payable at the end of the year of death. Assume that (i) commission is 10% of the first premium and 4% of cach subsequent premium, (ii) other expenses are $50 at issue, and $5 at each subsequent premium date, (iii) mortality follows the Standard Select Life Table, and (iv) interest is 5% per year. Calculate the annual premium.- A select life aged 50 purchases a 10-year endowment insurance with $100,000 sum insured. Premiums are payable annually in advance and death benefits are payable at the end of the year of death. Assume that (i) commission is 12% of the first premium and 3% of each subscquent premium, (ii) other expenses are $60 at issue, and $6 at each subsequent premium date, (iii) mortality follows the Standard Select Life Table, and (iv) interest is 5% per year. Calculate the annual premium.
- Gregorio Corp. purchased a P5,000,000 ordinary life insurance policy on its president. Gregorio is the beneficiary under the policy. The policy year and Gregorio' accounting year coincide. Additional data available for the year ended December 31, 2023 are as follows: Cash surrender value, January 1 Cash surrender value, December 31 Annual advance premium paid January 1 Dividend received on July 1 What amount should be reported as life insurance expense for 2023? P228,000 290,000 120,000 15,000Sam wants to donate $1,000,000 to establish a fund to provide an annual scholarship in perpetuity. The fund will earn an interest rate of j4-3.81% p.a. effective and the first scholarship will be first awarded 2.5 years after the date of the donation. (b) Assume that the fund's earnings rate rate has changed from 4-3.81% p.a. to j4-3.56% p.a. one year before the first scholarship payment. How much does Sam need to add to the fund at that time (one year before the first scholarship payment) to ensure that scholarship amount will be unchanged (rounded to two decimal places)? Question 9Answer a. 78309.64 b. 74276.05 C. 71226.96 d. 75395.75($ in millions) debit (Credit) Beginning balance Service cost Interest cost Expected return on assets Gain/loss on assets Amortization of: Prior service cost Net gain/ loss Loss on PBO Contributions to fund Retiree benefits paid Ending balance Multiple Choice What was Herring's prior service cost at the beginning of the year? $92 million. $64 million. $78 million. Prior Net Plan Service (Gain) Pension PBO Assets Cost (580) $82 million. (33) (59) 59 (667) 335 (14) 78 Loss Expense Cash 82 (4) 33 102 86 (31) (80) Net Pension (Liability)/Asset (333)
