You Have Just Been Awarded a $200,000 Insurance Settlement

question 250

Multiple Choice

You have just been awarded a $200,000 insurance settlement. The insurance company has offered to invest this amount at a guaranteed interest rate of 4.5% for ten years. You think you can invest this money yourself and earn an average return of 8%. If you are able to do that, how much more will your settlement be worth ten years from now than if you had left the funds with the insurance company?

• A) $78,829.69
• B) $86,991.91
• C) $118,009.42
• D) $121,191.12
• E) $137,188.23

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Definitions:

Maximization

The process of seeking the highest possible outcome or result from a set of choices or actions.

Base Rates

Basic pay rates established for roles or tasks before any additional benefits or allowances are added.

Not-invented-here Bias

A mindset or culture where innovations or solutions developed outside a particular group are undervalued or rejected, regardless of merit.

Conservative Decisions

Decision-making approaches that prioritize risk-aversion and stability, often favoring traditional methods over innovative solutions.