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You are the beneficiary of a life insurance policy. The insurance company informs you that you...

You are the beneficiary of a life insurance policy. The insurance company informs you that you have two options for receiving the insurance proceeds. You can receive a lump sum of $95,000 today or receive payments of $1,020 a month for ten years. You can earn 5% on your money. Which option should you take and why? You should accept the payments because they are worth $101,207.63 today. You should accept the payments because they are worth $96,166.98 today. You should accept the payments because they are worth $98,334.20 today. You should accept the $95,000 because the payments are only worth $94,577.13 today. You should accept the $95,000 because the payments are only worth $93,229.66 today.

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solution: Monthly interest rate- 15%/12 Period in months-10*12 120 * PVIFA(5%/12,120) | (1-(14(0.05/12))^-120)/(0.05/12) formula | 94281350 Monthly payment x PVIFA(5%/12, 120) value in todays dollar 1,020 94.28135 96,166.98 You should accept the payments because they are worth $96,166.98 today. ㅖ ト IH Sheet1204 . Sheet1205 Sheed206 . Sheet1207 .. Sheet1208 . Sheet1209 .. Sheet1210 . Sheet!211 0 ENG 21:47 US 30/01/2019

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