Question 1

Calculate the annual cash flows of a $500,000,12-year fixed-payment annuity earning a guaranteed 6 percent per year if annual payments are to begin at the end of the current year.

Accepted Answer

11efb84e_7214_5694_9137_2b83ab79cac2_TB1314_00 To calculate the annual cash flows, we can use the formula for the present value of an annuity:

PV = C * [1 - (1 + r)^(-n)] / r

Where PV is the present value (in this case, $500,000), C is the annual payment, r is the interest rate (6%), and n is the number of years (12).

We can solve for C:

C = PV * r / [1 - (1 + r)^(-n)]

Plugging in the values:

C = $500,000 * 0.06 / [1 - (1 + 0.06)^(-12)]

C = $59,638.51

Therefore, the annual cash flows are $59,638.51.

Question 2

Calculate the annual cash flows of a $2 million,10-year fixed-payment deferred annuity earning a guaranteed 8 percent per year if annual payments are to begin at the end of the sixth (6^th)year.

Accepted Answer

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Question 3

Calculate the annual cash flows of a $500,000,12-year fixed-payment deferred annuity earning a guaranteed 5 percent per year if annual payments are to begin at the end of year 4.

Accepted Answer

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Question 4

The operating ratio for a PC insurer equals

Accepted Answer

The answer of The operating ratio for a PC insurer...

Quiz 6: Financial Services: Insurance Companies

Calculate the annual cash flows of a $500,000,12-year fixed-payment annuity earning a guaranteed 6 percent per year if annual payments are to begin at the end of the current year.

Calculate the annual cash flows of a $2 million,10-year fixed-payment deferred annuity earning a guaranteed 8 percent per year if annual payments are to begin at the end of the sixth (6^th) year.

Calculate the annual cash flows of a $500,000,12-year fixed-payment deferred annuity earning a guaranteed 5 percent per year if annual payments are to begin at the end of year 4.

The operating ratio for a PC insurer equals

Quiz 6: Financial Services: Insurance Companies

Calculate the annual cash flows of a $500,000,12-year fixed-payment annuity earning a guaranteed 6 percent per year if annual payments are to begin at the end of the current year.

Calculate the annual cash flows of a $2 million,10-year fixed-payment deferred annuity earning a guaranteed 8 percent per year if annual payments are to begin at the end of the sixth (6th) year.

Calculate the annual cash flows of a $500,000,12-year fixed-payment deferred annuity earning a guaranteed 5 percent per year if annual payments are to begin at the end of year 4.

The operating ratio for a PC insurer equals

Calculate the annual cash flows of a $2 million,10-year fixed-payment deferred annuity earning a guaranteed 8 percent per year if annual payments are to begin at the end of the sixth (6^th) year.