Continuing from the Question Above, an Additional 10 People Join

question 18

Multiple Choice

Continuing from the question above, an additional 10 people join the group who have expected medical spending of $5,000 per person on average.The new premium will be approximately

• A)$1,500
• B)$2,200
• C)$2,500
• D)$4,500

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Definitions:

Accrued Interest

Interest that has been earned but not yet received or recorded as income by the company.

Face Value

The nominal or dollar value printed on a bond, note, or other financial instrument.

Bond Sinking Fund

A fund set aside by a corporation to repay bonds at maturity, ensuring the security of the bondholders' investment.

Bonds Payable

A long-term liability account that represents the amount a company owes to bondholders.