Q6 Ans B:

Price = D/(rate) => rate = D/P = 8/95 = 8.42%

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Today's Question (Questions and answers provided by
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Q7. You have just purchased a life insurance policy in which you have to make 40 semiannual payments of $350 each, the first payment is due in 6 months. There is a guarantee to provide effective annual rate of 8.16% interest per annum (semi-annual compounding). The policy will mature at the end of 20 years, and insurance co. will make the first payment after 1 year of maturity in 10 equal annual payments. How much you will receive at the each payment.

A. $4,724
B. $5,792
C. $4,992

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