An Insurance Firm Agrees to Pay You R3,310 at the End

question 3

Multiple Choice

An insurance firm agrees to pay you R3,310 at the end of 20 years if you pay premiums of R100 per year at the end of each year of the 20 years.Find the internal rate of return to the nearest whole percentage point.

• A) 9%
• B) 7%
• C) 5%
• D) 3%
• E) 11%

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Definitions:

Penalties

Financial or other forms of punishment applied for violation of rules, laws, or contracts.

Critical Path

The series of tasks in a project schedule that must be finished as planned for the project to conclude by its intended deadline.

Variance

A measure of the dispersion or spread in a set of data points, indicating how much the numbers in the dataset differ from the mean.