Question

Please help me understand this. I'm totally lost, I've tried two different ways, both resulting as incorrect. If you could show me how to do this I'd appreciate it.
Tom Hornet purchases $7,000 of ten year term life. He is 31 years old.

What is his annual premium? $
What is his quarterly premium? $
What is the difference between the two options?$

Answer 1

Hi there

annual premium
7,000÷10years=700 per year

quarterly premium
Quarterly means 4 times a year so
7,000÷(4×10)=175 per quarter

difference between them
700−175=525

Good luck!