Question

Spike has a life insurance policy with $1.5 million benefit. If this money was put into an account with a 5.2% interest rate, how much income can his beneficiaries expect in case spikes dies

Answer 1

Answer:

$T = 1500000*(1+0.052)^{t}$

Step-by-step explanation:

Life insurances with interest are the same as bank interest rates in the form that they are compound interest. Since they are compound interests we can use the Exponential Growth Formula to calculate the insurance policy payout. Which would be the following,

$T = a*(1+r)^{t}$

Where:

1. T is the final payout
2. a is the initial amount
3. r is the interest rate in decimal form
4. t is the time

Since we have the initial amount and the interest rate we can plug it into the formula to personalize the formula for our situation.

$T = 1500000*(1+0.052)^{t}$

Since we don't have the amount of years Spike has had his life insurance we cannot calculate the payout.

EXAMPLE:

If spike dies after 2 years of buying his life insurance the beneficiaries will get the following payout.

$T = 1500000*(1+0.052)^{2}$

$T = 1500000*(1.106704)$

$T = 1,660,056$

I hope this answered your question. If you have any more questions feel free to ask away at Brainly.

Answer 2

The total amount of interest earned each year will be
  5.2% × $1,500,000 = $78,000

_____
We would need to know more about the beneficiaries (their number and the way they might split the proceeds) and how they might use the balance in the account (whether interest only, or interest and principal are withdrawn) before we could answer the question asked.