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On January 1, an insurance company has 100,000 which is due to Linden as a life...

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Basic Math

On January 1, an insurance company has 100,000 which is due toLinden as a life insurance death benefit. He chooses to receive thebenefit annually over a period of 15 years, with the first paymentimmediately. The benefit he receives is based on an effectiveinterest rate of 4% per annum. Every July 1, the insurance companypays 100 in expenses and taxes to maintain the policy. At the endof nine years, the company has X remaining. Calculate X.

The answer is $53,900 im just not quite sure how to get it.

Answer & Explanation Solved by verified expert
3.6 Ratings (410 Votes)
The benefit he receives is based on an effective interest rate of 4 per annum The insurance company earns interest at an effective rate of 5 per annum Every July 1 the company pays 100 in expenses and taxes to    See Answer
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