You just received an insurance settlement offer related to an accident you had six years ago. The offer gives you a choice of on

Question

3 months ago

7

You just received an insurance settlement offer related to an accident you had six years ago. The offer gives you a choice of on

e of the following three offers: A: $1,565 a month for 72 months B: $1,012 a month for 10 years C: $100,000 as a lump sum payment today You can earn 7.5 percent on your investments. You do not care if you personally receive the funds or if they are paid to your heirs should you die within the settlement period. Which one of the following statements is correct given this information?

Mathematics

1 answer:

AnnZ [12.3K] · Answer 1 · 2026-02-26T12:24:53+03:00

answer:

Detailed explanation:

Option A: $1,565 monthly over 72 months

The total comes to $112,680

Option B: $1,012 each month for 10 years,

which is the same as 120 months

Thus, the total amount received is 1012×120

equaling $121,440.

Option C:

Receive $100,000 in a single payment.

All the details presented are accurate.

However,

As the individual has no preference whether to take the money personally or let it go to an heir, we can disregard the lump sum payment option of $100,000.

Furthermore, as they are willing to wait and are indifferent about who benefits from the insurance payout, the 72-month option can also be overlooked.

Therefore, choosing the second option is advisable since it provides the highest total and the most payments over time.

Waiting for ten years will yield $121,440.