What Is the Present Value of $25 to Be Received

question 132

Multiple Choice

What is the present value of $25 to be received at the end of each year for the next 6 years if the discount rate is 12%?

• A) $125.00
• B) $113.06
• C) $102.79
• D) none of the above

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Definitions:

Universal Life Insurance

A form of straight life insurance that allows the policy owner flexibility in choosing and changing terms of the policy.

Policy Owner

The individual or entity that holds and controls an insurance policy and has the right to exercise all privileges under the contract.

Face Value

The nominal or stated value of a financial instrument or document, such as a bond or stamp, not necessarily its market value.

Premiums

The amount of money charged by an insurance company for active coverage.