Question

Gertrude has a life insurance policy that will pay her family $97,000 per year I she dies. If interest rates are at 1.4% when the insurance company has to pay, what is the amount of the lump sum that the insurance company must put into a bank account? A. $692,857,142.90 B. $6,928,571.43 c. $692,857.14 D. $69,285,714.29​

Answer 1

The amount of the lump sum that the insurance company must put into a bank account is $6,928,571.43 option (B) is correct.

What is the percentage?

It's the ratio of two integers stated as a fraction of a hundred parts. It is a metric for comparing two sets of data, and it is expressed as a percentage using the percent symbol.

We have:

Gertrude has a life insurance policy that will pay her family $97,000 per year.

If interest rates are at 1.4% when the insurance company has to pay

r = 1.4%

or

r = 0.014

The amount of the lump sum that the insurance company must put into a bank account:

= 97,000/0.014

= 6928571.429 ≈ $6,928,571.43

Thus, the amount of the lump sum that the insurance company must put into a bank account is $6,928,571.43 option (B) is correct.

Learn more about the percentage here:

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