An Insurance Agent Has Recommended You Invest in a Policy

question 13

Multiple Choice

An insurance agent has recommended you invest in a policy that promises to pay you $10,000 a year upon retirement. The payments will continue for 15 years after you retire. If you plan
To retire in 25 years and can earn a constant effective annual rate of 12% on similar
Investments, what is the maximum you should be willing to pay for this policy today? Assume
The first payment will be made at the end of the 25th year and round your answer to the
Nearest dollar.

• A)$4,487
• B)$76,282
• C)$68,109
• D)$4,006

---

Definitions:

Religious Services

Formalized periods of communal worship, often held in a place of worship according to specific religious traditions.

Rates of Depression

Refers to the prevalence or incidence of depression in a particular population over a specific period of time.

Elderly People

Individuals, typically aged 65 and older, often considered senior citizens or older adults.

GAS

The General Adaptation Syndrome, a model describing the body's short-term and long-term reactions to stress.