Question

Matt Miller, age 28, takes out $50,000 of straight-life insurance. His annual premium is $418.20. Using

the tables in the Business Math Handbook that accompanies the course textbook, determine the cash value
of his policy at the end of 20 years.
A. $13,250
B. $26,000
C. $30,000
D. $26,500

Answer 1

Look at the table that mentions "cash value". Locate "20" in the first column (the "years" column). Right next to 20 is the value 265. That's the multiplier we will use.

50,000/1,000 = 50 will be multiplied with 265 to get 265*50 = 13,250

So the cash value of this policy is $13,250