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Question
A life insurer owes $550,000 in 8 years. To fund this outflow the insurer wishes to buy strips that mature in 8 years. The strips have a $5,000 face value per strip and pay a 6% APR with semiannual compounding. How much must the insurer spend now to fully fund the outflow (to the nearest dollar)?
A. $110,000
B. $342,742
C. $355,224
D. $362,355
E. $370,890
Answer
This answer is hidden. It contains 29 characters.
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