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2 years ago

Why is term life insurance better than whole life insurance?

1 answer:

5 0

Answer: Term life is “pure” insurance, whereas whole life adds a cash value component that you can tap during your lifetime. Term coverage only protects you for a limited number of years, while whole life provides lifelong protection—if you can keep up with the premium payments.

Explanation:

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You borrow $210,000 to purchase a home. the terms of the loan call for monthly payments over 30 years at a mortgage rate of 4.50

Dmitry_Shevchenko [17]

First step, find the monthly payments.
Borrowed amount, P = 210000
Monthly interest, i = 0.045/12
Number of periods, n = 30*12=360

Monthly payment
$A=\frac{P(i*(1+i)^n)}{(1+i)^n-1}$
$=\frac{210000(0.045/12*(1+0.045/12)^360)}{(1+0.045/12)^360-1}$
$=1064.0392$ [to the 1/100 of a cent]

2. Calculate interest accumulated over 60 months
$I=210000((1+0.045/12)^{60}-1)$
$=52877.12$

3. Calculate value of payments
$F=\frac{A((1+i)^n-1)}{i}$
$=\frac{1064.039150634359((1+0.045/12)^{60}-1)}{0.045/12}$
$=71445.50$ to the nearest cent

4. Calculate percentage of interest paid
A. as a fraction of future values
Percentage of interest
=52877.12/71445.50
=74.01%
As a fraction of total amounts paid
Percentage of interest
=52877.12/(60*1064.0392)
=52877.12/63842.35
=82.82%

6 0

3 years ago

When switching from a traditional costing system to an activity-based costing system that contains some batch-level costs: Multi

Naddika [18.5K]

Answer:

Option D- The unit product costs of high volume products typically decrease and the unit product costs of low volume products typically increase.

Explanation:

The reason is that the company has batch level costs which are fixed indirect costs that are to be assigned to the product and are fixed amounts say $100. Also assume that there are two type of units, Unit A and B. Suppose that the batch cost any number of units of A produced will remain the same and similarly for product B. This means if the units produced of A are at 20 unit per batch and product B produced are 10 units per batch then Activity Based Costing says that the unit cost of batch cost absorbed in Product A would be $5 ($100 / 20) and that for product B would be $10 ($100 / 10). So this example better explains cost behavior of batch cost which is fixed for different levels of production.

This means the fixed cost per unit which decreases with increase in production will keep decreasing if the number of units produced starts increasing. In other words, the similar class of units if are produced in higher quantity then the cost per unit will be decreased due to decrease in fixed cost per unit and vice versa.

3 0

3 years ago

Osawa, Inc., planned and actually manufactured 200,000 units of its single product in 2017, its first year of operation. Variabl

kompoz [17]

Answer:

The correct answer is C.

Explanation:

<u>The variable costing method incorporates all variable production costs (direct material, direct labor, and variable overhead).</u>

We need to calculate the net operating income:

Sales= 120,000*40= 4,800,000

Total variable cost= (20 + 10)*120,000= (3,600,000)

Total contribution margin= 1,200,000

Fixed manufacturing costs= (600,000)

Fixed operating (nonmanufacturing) costs= (400,000)

Net operating income= 200,000

6 0

3 years ago

On January 2, Cohan Company acquired 37% of the outstanding stock of Sanger Company for $715,500. For the year ended December 31

anzhelika [568]

Answer:

Explanation:

check the file attached for solution i hope it helps

Download docx

5 0

3 years ago

A pension fund has an average duration of its liabilities equal to 15 years. The fund is looking at 5-year maturity zero-coupon

gayaneshka [121]

Answer:

The 52 of its portfolio should be allocated to the zero-coupon bonds to immunie if there are no other assets funding the plan.

Explanation:

the duration of the perpetuity = (1+YTM)/YTM

= (1+0.04)/0.04

= 26 years

the weights of the bonds = w

5*w + 26*(1-w) = 15

5*w + 26 - 26*w = 15

21*w = 11

w = 0.52

Therefore, The 52 of its portfolio should be allocated to the zero-coupon bonds to immunie if there are no other assets funding the plan.

7 0

3 years ago