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You Are Considering Two Insurance Settlement Offers

Question 78

Multiple Choice

You are considering two insurance settlement offers.The first offer includes annual payments of $5,500,$7,500,and $11,000 over the next three years,respectively.The other offer is a lump sum amount today.The applicable discount rate is 5.5 percent.What is the minimum amount you will accept today in lieu of the annual payments?


A) $20,877.67
B) $21,319.41
C) $22,213.15
D) $23,387.50
E) $24,556.88 You are considering two insurance settlement offers.The first offer includes annual payments of $5,500,$7,500,and $11,000 over the next three years,respectively.The other offer is a lump sum amount today.The applicable discount rate is 5.5 percent.What is the minimum amount you will accept today in lieu of the annual payments? A) $20,877.67 B) $21,319.41 C) $22,213.15 D) $23,387.50 E) $24,556.88

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