Bette has a life insurance policy that will pay her family $40,000 per year if

she dies. Bette's insurance company expects that it would have to put

$2,500,000 into a bank account so that it could make the payments. What

does Bette's insurance company expect the interest rate to be?

Question

21 December, 10:03

+1

Answers (1)

Know the Answer?

Harper Mclaughlin · Answer 1

1.6%

Step-by-step explanation:

Solve for r

40,000 = (2,500,000) (r/100) (1)

40,000 = (25,000) r

r=40,000/25,000

r=1.6

Bette has a life insurance policy that will pay her family $40,000 per year ifshe dies. Bette's insurance company expects that it would have to put$2,500,000 into a bank account so that it could make the payments. Whatdoes Bette's insurance company expect the interest rate to be?