Sara Wald died, leaving to her husband Benno an insurance policy contract that provides that the...

Sara Wald died, leaving to her husband Benno an insurance policy contract that provides that the beneficiary (Benno) can choose any one of the following options:

a) 55,000 immediate cash

b) 4,000 every 3 months payable at the end of each quarter for 5 years

c) 18,000 immediate cash and 1,800 every 3 months for 10 years, payable at the beginning of

each 3-month period

d) 4,000 every 3 months for 3 years and 1,500 each quarter for the following 25 quarters, all

payments payable at the end of each quarter

Using the interest rate of 2.5 per quarter, compounded quarterly, which option would you recommend

that Benno exercise?

Solutions

Expert Solution

ekkarill92 answered 10 months ago

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