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You inherit $10K when you are 20. What is this worth when you are ready to retire at 65? Assume that the money can be invested at 7%, which is your interest rate for the time value of money. Compare this with an insurance policy that could be purchased with a lump-sum payment of $10K. That policy would pay you $100K at age 65 and your survivors $100K if you die sooner. How much value per year must you put on protecting your survivors for these to be equivalent?

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Business Economics, Economics

Category:- Business Economics
Reference No.:- M92637825

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