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
vaieri [72.5K]
3 years ago
14

The Maybe Pay Life Insurance Co. is trying to sell you an investment policy that will pay you and your heirs $27,000 per year fo

rever. Suppose a sales associate told you the policy costs $472,000. At what interest rate would this be a fair deal
Business
1 answer:
TEA [102]3 years ago
4 0

Answer:

5.72%

Explanation:

This involves perpetual annuity, where there are equal cash flows for infinity paid in specific durations

To find the interest rate we use the perpetuity cash flows equation.

Present value(P)= Yearly payments(Y)/Interest rate(I)

P= $472,000

Y= $27,000

I= ?

So 472,000= 27,000/I

Cross-multiply

472,000*I= 27,000

I= 27,000/472,000

I= 0.0572

Remember to express interest as percentage

I= 0.0572* 100= 5.72%

You might be interested in
What is the square root of 5
vekshin1
2.24. if you round 5.0176 down it is 5.
7 0
2 years ago
George works in the accounting department at the Green Goddess Lawn Services, where it is his job to record all transactions int
Sedbober [7]

Answer:

The correct answer is post the information to the ledger.

Explanation:

In accounting, the general ledger is a document where all the transactions of corporations are recorded in chronological order. Each account must have a different book, which must be affected each time the accounts are involved in this process. These records make it possible to know the movements in a more detailed way, since unlike the journal in this case, only a single group of accounts is known and not the whole.

7 0
3 years ago
The oviedo thespians are planning to present performances of their florida revue on 2 consecutive nights in january. it will cos
bagirrra123 [75]
<span>For 2 nights cost is $10,000 for theater rental, insurance, and musicians. 10% of $10,000 is $1000 that goes to theater if $10,000 worth of ticket is sold, which is to break even. Now the break even cost is $10,000+$1000= $11,000. Cost of one ticket is $10, to break even the total cost, number of tickets that must sell is $11,000 divided by $10, which is 1100 tickets. 1100 tickets must sell in total for two nights to break even.</span>
7 0
2 years ago
An organization is ready to launch a new product. When working through its pricing strategy, the organization should set the pri
eduard
The right answer for the question that is being asked and shown above is that: "at the price consumers are willing to pay." An organization is ready to launch a new product. When working through its pricing strategy, the organization should set the price of the product <span>at the price consumers are willing to pay.</span>
5 0
3 years ago
What is speculative risk?
Stels [109]

Answer:

A speculative risk is uncertain degree of gain or loss.                                                            Every speculative risk are made as conscious choices and are not just a result of uncontrollable circumstances.

Explanation:

It's basically a conscious choice you made!

3 0
2 years ago
Other questions:
  • What recently happened in the automobile industry that exemplifies the idea that "we need to value more the creation of ideas in
    5·1 answer
  • That portion of corporate profits which is included in personal income is: dividends corporate income taxes consumption of fixed
    11·1 answer
  • From the buyer's perspective, which of the following is a benefit of a product with a well-known brand name?
    6·1 answer
  • Beta coefficients may be computed for investment companies and used to compute risk-adjusted rates of return.
    5·1 answer
  • What will happen to the supply of beef when the price paid for beef cattle drops ?
    14·2 answers
  • 1. What is the difference between a MIS and formal market research?
    12·1 answer
  • Grey, Inc., uses a predetermined rate to apply overhead. At the beginning of the year, Grey budgeted its overhead costs at $220,
    15·1 answer
  • The production department in a process manufacturing system completed 80,000 units of product and transferred them to finished g
    12·1 answer
  • A start-up is expanding overseas and spends an excessive amount of time on
    15·1 answer
  • New classical economists believe that an increase in deficit financing by the government will
    13·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!