Geraldine Was Injured in a Car Accident, and the Insurance

question 128

Multiple Choice

Geraldine was injured in a car accident, and the insurance company has offered her the choice of $25,000 per year for 15 years, with the first payment being made today, or a lump sum.If a fair return is 7.5%, how large must the lump sum be to leave her as well off financially as with the annuity?

• A) $225,367
• B) $237,229
• C) $249,090
• D) $261,545
• E) $274,622

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Definitions:

Mitosis

A process of cell division in eukaryotic cells where the nucleus divides, resulting in two daughter cells each having the same number and kind of chromosomes as the parent nucleus.

Parent Cell

A cell that divides to give rise to daughter cells through the processes of mitosis or meiosis, serving as the original source for the genetic material.

Oncogene

Gene that helps transform a normal cell into a tumor cell.

Tumor Cell

A cell that has undergone transformation leading to uncontrolled division, which can form a mass or neoplasm potentially leading to cancer.