Estimate the cash value of a life insurance policy as of December 31, 2016 based on...
Estimate the cash value of a life insurance policy as of December 31, 2016 based on the following information: Cash value as of January 2016 $90,000 Total premium during the year $ 8,000 Term life annual cost $ 525 Annual expense charge $ 300 Expected return on the policy for 2016 6 %
Homework Answers
Please see the table below, done in a sequential manner. Please be guided by the sign such as [+] / [-] before every item to understand whether a particular item has been added or subtracted to get the final answer. The final answer is available in the cell colored in yellow.
| Parameter | $ |
| Cash value as of 1st January 2016 | 90,000 |
| [+] Total premium during the year | 8,000 |
| [-] Term life annual cost | 525 |
| [-] Annual expense charge | 300 |
| [+] Expected return on the policy for 2016 (6% x 90,000) | 5,400 |
| Cash value as of 31st Dec 2016 | 102,575 |
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