Your Client Has the Following Choices for an Insurance Benefit

question 6

Short Answer

Your client has the following choices for an insurance benefit: She can receive $2,000 at the end of each year for the next five years or one "lump" sum today. If the current interest rate is 4.5% compounded annually, what lump payment today is equivalent to the five payments? (Taken from CIFP course materials.)

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Definitions:

Horizontally

In a direction or alignment from left to right or right to left, parallel to the horizon.

Vertically

In a direction or way that is perpendicular to the horizon; from top to bottom or bottom to top.

Insert Table

A function in software applications that allows users to add a table into a document, spreadsheet, or presentation to organize and present data systematically.

Content Placeholder

A tool in presentation and layout software that marks a location where content (text, images, videos) can be inserted.