1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
Kaylis [27]
3 years ago
12

K owns a variable annuity with an assumed interest rate of 4%. If the actual performance of the separate account(s) is 5%, the e

ffect on this month's income benefit check will be such that it:
Business
1 answer:
pickupchik [31]3 years ago
4 0

Answer:

Since the actual performance of the separate account is actually higher than the assumed interest by 1 %, this means that K will be paid 1% more on the value of his/her annuity account.

Explanation:

An annuity account is a policy holder's investment account where the insurance company invests on behalf of the annuitant. The insurance company determine an assumed interest rate that will cover for the insurance company costs and the profit margin that will be paid to the annuitant periodically.

Annuity interest help investors plan for retirement income since the annuitant knows how much they expect to receive upon maturity of the policy. Knowing how to calculate the value of an annuity can also help investors to consider other investment options.

An assumed interest rate that is determined by the insurance company. This is the value of the annuity account and the annuitant should not be paid below the value of this rate. The actual interest rate is the actual performance of the investment in the market. If this rate increases, then the value of payment to be made to the annuitant also increases.

In our case, the actual performance of the separate account is actually higher than the assumed interest by 1 % this means that K will be paid 1% more on the value of his/her annuity account.

You might be interested in
What do trade associations provide?
jeyben [28]

Answer: Trade associations are non-profit organizations whose primary purpose is to <u>provide different learning tools for businesses in a particular industry.</u>

7 0
3 years ago
Teddy is considering buying flood insurance. The cost of flood insurance is $400 per year. Teddy predicts that there is a 20% ch
jeka94

Answer:

Expected payoff from insurance:

$1000*0.20 = $200

0*0.80=0

Expected payoff is $200

He pais $400 for insurance.

He gains only if there is a flood, but he has an expected loss of $200

5 0
3 years ago
If data indicates the economy is in recession and members of Congress are working to pass legislation to encourage economic grow
netineya [11]

If data indicates the economy is in recession and members of Congress are working to pass legislation to encourage economic growth, then recognition of change in the economy has almost certainly occurred. Recognition of change in the economy involves massive capital migration from one industrial sector to another, from one community to another, and even from one nation to another.

3 0
3 years ago
Read 2 more answers
ABC Company has elected to adopt the dollar-value LIFO inventory method when the inventory is valued at $125,000. The adoption t
Brut [27]

Answer:

Explanation:

K

8 0
3 years ago
If you borrowed $5,000 for four years, that would be a
lukranit [14]
The answer is the second one “Long-term loan”
3 0
3 years ago
Other questions:
  • What is one explanation for why this labor supply curve is upward sloping? the opportunity cost of leisure decreases as wages de
    13·2 answers
  • PLEASE HELP ME!
    5·2 answers
  • The formula for calculating the present value factor for an annuity of $1 is a. Amount to Be Invested/Equal Annual Net Cash Flow
    12·1 answer
  • If the price of gasoline is relatively high for a long time, consumers are more likely to buy fuel-efficient cars or switch to a
    15·1 answer
  • Which of the following is an important principle for effectively interacting with the audience during presentations? Multiple Ch
    12·1 answer
  • Business ethics are not divorced from personal ethics, which are generally accepted principles of right and wrong goverming the
    5·2 answers
  • The statement of cash flows reports all but which of the following: Multiple Choice
    14·1 answer
  • Bonnie is writing a cover letter for a job application.She has written the introduction describing her strengths.However,she is
    12·1 answer
  • Consider a $6500 piece of machinery, with a 5-year depreciable life and an estimated $1200 salvage value. The projected utilizat
    13·1 answer
  • Joe and Janice run an accounting firm. The firm receives $5,000,000 as income from its services. It pays an annual rent for offi
    12·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!