Example: Insurance Policy. You are evaluating your $50,000 insurance policy. The premium of $1,010 is due at the beginning of the year, and a dividend of $165 is received at the end of the policy year. The cash value of the policy is $3,302 at the beginning of the year; it will grow to $4,104 by the end of the year. You can earn 6% on a savings account. What is the annual price per $1,000 protection?
Select the correct equation in the Solver. |
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1010 |
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| 52H08#K(#(&((" | Stores annual premium. | |||
| 52H0" |
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3302 |
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| 9O198%K%($&((" | Stores value of policy at | |||
| 9O19" |
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| end of last year. |
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6 | u |
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| ;68'&((" | Stores interest rate you | |||||
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4104 |
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| O198+K#(+&((" | Stores value of policy at | |||||
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| O19" |
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| end of this year. |
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| Stores annual dividend. | |||
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165 |
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50000 |
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| G17H8.(K(((&((" | Stores face value of | ||||||
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| policy. |
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| Your protection cost | ||||||||
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| $6.57 per $1,000 face |
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Insurance protection could be purchased for $3 per $1,000 face value. Calculate the rate of return on your savings.
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3 |
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| ;<F8%&((" | Stores price of alternate |
;<F" | ||||
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| ;68$&$(" | Calculates rate of return. | ||
u |
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214 14: Additional Examples
File name : | Print data : 2003/7/11 |