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An Insurance Company Considers the Present Value of a 10-Year

Question 229

Multiple Choice

An insurance company considers the present value of a 10-year term life insurance policy to be $3,738. The premiums that the company collects are $55 at the beginning of every month for the 10 years. What monthly compounded nominal rate is implied in the calculation of the policy's value?


A) 12.900%
B) 10.750%
C) 13.690%
D) 8.473%
E) 14.298%

Correct Answer:

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