Sam has a $500,000 life insurance policy that will pay his wife out over 20 years upon his death.If the life insurance company credited a 9% rate to the policy,what will be the amount of each annual payment?

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The calculation involves finding the annuity payment using the formula for the present value of an annuity due to the life insurance payout structure. Given a present value (PV) of $500,000, an interest rate (r) of 9% (or 0.09), and a period (n) of 20 years, the annuity payment (PMT) can be calculated using the formula: PMT = PV * [r / (1 - (1 + r)^-n)]. Plugging in the values: PMT = 500,000 * [0.09 / (1 - (1 + 0.09)^-20)], which calculates to approximately $54,773.24 annually.

Sam Has a $500,000 Life Insurance Policy That Will Pay