ZuoTi.Pro
Question

16. At the time he purchased his variable annuity, Ahmed directed $5,000 of his premium into...

16. At the time he purchased his variable annuity, Ahmed directed $5,000 of his premium into Subaccount A when the unit value was $10. A year later, the unit value had increased to $15. Assuming he made no additional premium deposits, what is the value of Ahmed's investment in Subaccount A now? a. $25,000 b. $16,666 c. $7,500 d. $8,333

business   finance   
0 0
Add a comment Improve this question Transcribed image text
Next > < Previous
Sort answers by oldest

Homework Answers

✔ Recommended Answer
Answer #1

Premium Invested = $5000

Investment Price = $10

Therefore, Units Purchased = Total Premium/Investment Price = 5000/10 = $500

Value after 1 year = $15

Therefore, Value of Investment afte 1 year = Number of units×Value after 1 year = 500×15 = $7500

Therefore, Correct Answer is (c)$7500.

(If this was helpful then please give postive rating to the answer. Thank You:)

9 0
Add a comment
Know the answer?
Add Answer to:
16. At the time he purchased his variable annuity, Ahmed directed $5,000 of his premium into...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Similar Homework Help Questions

  • Mack purchased a variable annuity with a $50,000 premium deposit, which he split equally between two...

    Mack purchased a variable annuity with a $50,000 premium deposit, which he split equally between two subaccounts. At the time of purchase, the value of a unit in Subaccount #1 was $25, and the value of a unit in Subaccount #2 was $10. Six months later, the unit value of Subaccount #1 had risen to $30, and the unit value of Subaccount #2 had declined to $8. What was the value of Mack's contract at that point? (Search Chapter 2)...

  • 7. Marcia purchased a deferred variable annuity and selected two subaccounts, A and B, for the...

    7. Marcia purchased a deferred variable annuity and selected two subaccounts, A and B, for the allocation of her $20,000 premium deposit. She directed $15,000 into Subaccount A and $5,000 into Subaccount B. At the time of her purchase, the value of a Subaccount A unit was $15, and the value of a Subaccount B unit was $10. How many total units did Marcia purchase? (Search Chapter 2) a. 20,000 b. 15,000 c. 2,000 d. 1,500

  • 11. John purchased a variable annuity with a premium deposit of $30,000. He allocated these funds...

    11. John purchased a variable annuity with a premium deposit of $30,000. He allocated these funds equally among three of the contract's investment options: a domestic stock account fund, a long-term bond account fund, and the fixed account fund. How much of John's original investment will the insurer guarantee? (Search Chapter 2) a. $10,000 b. $20,000 c. $30,000 d. $0 · 12. With respect to the current interest rates that are declared and credited to traditional fixed annuities, which of...

  • 5. Joseph exchanged farmhouse that he used in his farming business for a building used by...

    5. Joseph exchanged farmhouse that he used in his farming business for a building used by Sandy in her motorcycle manufacturing business. The farmhouse had a FMV of $345,000 and cost $285,000. The allowable depreciation was $45,000, but because of an error, Joseph only took $25,000 of depreciation. The building had a FMV of $275,000 and an adjusted basis of $315,000. Because the building was expected to increase in value rapidly, Sandy only gave Joseph $45,000 cash. What is Joseph's...

  • 1. You have $49,061.69 in a brokerage account, and you plan to deposit an additional $5,000...

    1. You have $49,061.69 in a brokerage account, and you plan to deposit an additional $5,000 at the end of every future year until your account totals $200,000. You expect to earn 9.1% annually on the account. How many years will it take to reach your goal? Round your answer to the nearest whole number. 2. Present and Future Value of an Uneven Cash Flow Stream An investment will pay $100 at the end of each of the next 3...

  • 14) Which of the following statements about life income settlement options is (are) true 1. Under...

    14) Which of the following statements about life income settlement options is (are) true?I. Under a joint-and-survivor life income option, payments cease at the death of the second (last) surviving) annuitant,II. Under a life income with guaranteed period, a contingent beneficiary is guaranteed a minimum number of payments regardless of when the primary beneficiary dies.A) I onlyB) II onlyC) both I and II]D) neither I nor II15) Bruce left a question about heart disease blank on his life insurance application...

  • Jimmy and Jane Have Goals Jimmy Johnson is 25 years old. He and his wife Jane...

    Jimmy and Jane Have Goals Jimmy Johnson is 25 years old. He and his wife Jane have two children, Emmitt and Patricia, ages 2 and 4 respectively. Jimmy wants to retire in 40 years and build boats. He would like a nice retirement home with some land on a peaceful lake in the mountains of Georgia. Jimmy believes that to purchase a home and lot in 40 years would cost $300,000 in today’s prices. In forty years Jimmy also believes...

  • QUESTION TWO Salvador Ryan is an accountant and the Director of his accounting practice, Darwin Taxation...

    QUESTION TWO Salvador Ryan is an accountant and the Director of his accounting practice, Darwin Taxation Services Pty Ltd. The following figures do not include GST. The company receipts ard payments for the year ended 30 June 2017 are as follows: Receipts 600,000 25,000 17,000 Professional accounting fees Sales of Do-It-Yourself Superannuation guides Dividend received from an Australian company franked to 50 % Interest on Bank Deposits Rental income from an investment property Profit on sale of office equipment (note...

  • Robert Johnson is 25 years old. He and his wife Jane have two children, Emmitt and...

    Robert Johnson is 25 years old. He and his wife Jane have two children, Emmitt and Patricia, ages 2 and 4 respectively. Robert wants to retire in 40 years and build boats. He would like a nice retirement home with some land on a peaceful lake in the mountains of Georgia. Robert believes that to purchase a home and lot in 40 years would cost $300,000 in today’s prices. In forty years Robert also believes he and Patricia can live...

  • Jimmy and Jane Have Goals Jimmy Johnson is 25 years old. He and his wife Jane...

    Jimmy and Jane Have Goals Jimmy Johnson is 25 years old. He and his wife Jane have two children, Emmitt and Patricia, ages 2 and 4 respectively. Jimmy wants to retire in 40 years and build boats. He would like a nice retirement home with some land on a peaceful lake in the mountains of Georgia. Jimmy believes that to purchase a home and lot in 40 years would cost $300,000 in today’s prices. In forty years Jimmy also believes...

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT