Your Insurance Agent Is Trying to Sell You an Annuity

question 27

Multiple Choice

Your insurance agent is trying to sell you an annuity that costs $200,000 today.By buying this annuity,your agent promises that you will receive payments of $835.88 a month for the next 40 years.What is the rate of return on this investment?

• A)3.95%
• B)4.00%
• C)4.15%
• D)4.22%
• E)4.55%

Understand the difference between variable costing and absorption costing, and their applications.

Grasp the concepts of sales mix and its significance in CVP analysis.

Comprehend the use of cost-volume-profit (CVP) analysis and charts.

Learn the external reporting requirements for costing methods.

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Definitions:

Discriminant

In algebra, the discriminant is a quantity expressed in terms of the coefficients of a polynomial equation that can determine the nature and number of the roots.

Real Solutions

Solutions to an equation that are real numbers, as opposed to imaginary or complex numbers.

Quadratic Formula

A formula that provides the solutions to a quadratic equation ax^2 + bx + c = 0, given as (-b ± √(b^2-4ac))/2a.

Rectangular Base

Refers to the base of a geometric figure that has a rectangle shape.