Respuesta :
Calculation of rate of return from the policy:
It is given that you just paid $344,000 for a policy that will pay you and your heirs $11,600 a year forever. It means the nature of the return is perpetual. And the perpetual rate of return can be calculated with the help of following formula:
Perpetual rate of return = Annual return / Investment
= 11600 /344000
= 0.0337
=3.37%
Hence the rate of return from the policy is 3.37%
Answer:
11600/344000=.03372*100=3.372
3.37%
Explanation:
Divide the annual payment amount by the present value.
