intrences800GookSuppose you are 35 and have a $90,000 face amount, 15-year, limited-payment, participating policy (dividends will be used tobuild up the cash value of the policy). Your annual premium is $810. The cash value of the policy is expected to be $3,600 in 15years. Using time value of money and assuming you could invest your money elsewhere for a 8 percent annual yield, calculate thenet cost of insurance. Use (Exhibit 1-A, Exhibit 1-B, Exhibit 1-C, Exhibit 1-D)Note: Use appropriate factor(s) from the tables provided. Do not round intermediate calculations. Round time value factor to 3decimal places and final answer to the nearest whole number.Net cost of insuranceD

Step 1: Finding the FV of annuity of $810 for 15 years @ 8% pa Formula for future value of…

Answered: int rences 8 00 Gook Suppose you are 35…

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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YYou expect your retirement fund to be able to afford $40,000 a year, adjusted for 3% annual growth in cost of living, for 20 years. If the fund can earn a return of 10% per annum, how much money you should put aside for the fund now? Question 1 options: $418,018.90 $407, 593.00 $292,613.23 $430,559.47
Suppose you are 35 and have a $105,000 face amount, 15-year, limited-payment, participating policy (dividends will be used to build up the cash value of the policy). Your annual premium is $945. The cash value of the policy is expected to be $4,200 in 15 years. Using time value of money and assuming you could invest your money elsewhere for a 8 percent annual yield, calculate the net cost of insurance. Use (Exhibit 1-A, Exhibit 1-B, Exhibit 1-C, Exhibit 1-D) Note: Use appropriate factor(s) from the tables provided. Do not round intermediate calculations. Round time value factor to 3 decimal places and final answer to the nearest whole number. Answer is complete but not entirely correct. Net cost of insurance 38,896 $
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