Question

In: Math

A life insurance company invests ​$7000 in a bank account in order to fund a death...

A life insurance company invests ​$7000 in a bank account in order to fund a death benefit of ​$28 comma 000. Growth in the investment over time can be modeled by the differential equation​ below, where i is the interest rate and​ A(t) is the amount invested at time t​ (in years). Calculate the interest rate that the investment must earn in order for the company to fund the death benefit in 36 years.

dA over dt = Ai

Solutions

Expert Solution

milcah answered 2 years ago
Next > < Previous

Related Solutions

Is life insurance simply a death benefit?
Is life insurance simply a death benefit? 
Company Y wants to deposit money in a bank account in order to be able to...
Company Y wants to deposit money in a bank account in order to be able to withdraw €50,000 after the first three years, and €60,000 after additional two years. The bank offers 6% annual interest rate for the first three years and 8% interest for the following years. What amount should Y deposit now?
Sam retires today at the age of 61 and invests his life savings into an account...
Sam retires today at the age of 61 and invests his life savings into an account that is guaranteed to earn 3.83% per year. Sam expects to live to the age of 92, withdraw $0.103mln from the account at the end of each year, and leave his heirs $1.726mln (this amount will be the account balance at the time of his death). How much is Sam putting in the account today, in $ million? Round to the nearest $0.001 million....
Victor invests 300 into a bank account at the beginning of each year for 20 years....
Victor invests 300 into a bank account at the beginning of each year for 20 years. The account pays out interest at the end of every year at an annual effective interest rate of i% . The interest is reinvested at an annual effective rate of i / 2 %. The yield rate on the entire investment over the 20 year period, if he would only make deposits of 300 due is 8% annual effective. Determine i.
Co receives April 2017 bank statement showing $7000 on deposit. The Co’s books show the account...
Co receives April 2017 bank statement showing $7000 on deposit. The Co’s books show the account to have a cash balance of $6590. The reconciliation process May 31st revealed the following: of $3000 deposited over the month, the bank had not yet received the last deposit of $500 made on May 30th. The bank also collected $100 on a $90 Note Receivable plus $10 interest. Three checks had written for a total of $1000 had not yet cleared the bank....
The options for the disbursement of life insurance death proceeds include all of the following EXCEPT:...
The options for the disbursement of life insurance death proceeds include all of the following EXCEPT: Leave with insurer to pay interest Paid in one cash payment Use to purchase paid-up insurance for the beneficiary Paid as a life income to the beneficiary, with a certain number of payments guaranteed
When must an insurable interest exist in life insurance? both at the time of death and...
When must an insurable interest exist in life insurance? both at the time of death and at the inception of the policy only at the inception of the policy only at the time the beneficiary is paid only at the time of death
Five years ago, Debora gave a life insurance with a $750,000 death benefit to her daughter,...
Five years ago, Debora gave a life insurance with a $750,000 death benefit to her daughter, Linda. At the time of gift, the value of the life insurance was $65,000, and Debora paid $10,000 in federal gift tax. Debora passed away this year. What amount will be included in her federal gross estate related to this life insurance policy.
Mr. Nailor invests $20,000 in a money market account at his local bank. He receives annual...
Mr. Nailor invests $20,000 in a money market account at his local bank. He receives annual interest of 6% for 5 years. How much return will his investment earn during this time period? Use Appendix A to calculate the answer. Multiple Choice $14,940 $6,760 $24,444 $26,760
1:The 1929 New York bank insurance fund (“Safety Fund”) (a) would not have enough money to...
1:The 1929 New York bank insurance fund (“Safety Fund”) (a) would not have enough money to pay for all noteholders if things really went bad, then why would it increase the public’s confidence in banks? (b) What did it mean that the Fund represented the idea that “banking was a system... not just an aggregation of free agents?" 2:In the 1820s, two Massachusetts legal cases ruled in favor of defendants who caused economic damage to others while pursuing activities that...
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT