Question

In: Finance

The beneficiary of a life insurance policy will receive payments of $722 per month for 18...

The beneficiary of a life insurance policy will receive payments of $722 per month for 18 years. At an annual interest rate of 5%, what is the value of the monthly payment stream in today’s dollars?

Solutions

Expert Solution

Monthly Payment = $722

Time Period = 18 years

Interest Rate = 5%

Calculating Present Value,

Using TVM Calculation,

PV = [FV = 0, T = 216, I = 0.05/12, PMT = 722]

PV = $102,697.76


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