Julia Baker died, leaving to her husband Brent an insurance policy contract that provides that the beneficiary (Brent) can choose any one of the follo
Julia Baker died, leaving to her husband Brent an insurance policy contract that provides that the beneficiary (Brent) can choose any one of the following four options.
\r\n(a $55,000 immediate cash.
\r\n(b $4,000 every 3 months payable at the end of each quarter for 5 years.
\r\n(c) $18,00 immediate cash and $1,800 every 3 months for 10 years, payable at the beginning of each 3-month period.
\r\n(d) $4,000 every 3 months for 3 years and $1,500 each quarter for the following 25 quarters, all paymentspayable at the end of each quarter.
\r\nInstructions
\r\nIf money is worth 2½% per quarter, compounded quarterly, which option would you recommend that Brent exercise?