Question

10 multiple choice 2 points peter purchases a car for $39,380 at 2.9% add-on rate for 5 years. choose the amount of interest and the monthly payment for the car loan. interest = $5710.10; monthly payment = $751.50 interest = $5910.10; monthly payment = $791.50 interest = $6110.10; monthly payment = $831.50 interest = $6010.10; monthly payment = $811.50 11 multiple choice 2 points to determine life-insurance premiums, companies must compute the probable date of death. on the basis of research done by the company, mr. timmons, age 53, is expected to live another 23.25 years. does this mean that mr. timmons will live to the age of 76.25 years? if not, what does it mean? no, it means that if we consider many people like mr. timmons (the same age, the same specific profession, the same risk factors, and so on), the average lifespan of such people would be 76.25 years. yes, it does. no, it means that mr. timmons will live longer than 76.25 years. no, it means that if we consider many people like mr. timmons (the same age, the same specific profession, the same risk factors, and so on), approximately half of them will live until they are 76.25 years old.

Explanation:

Question 10

Step1: Calculate Interest

The formula for simple interest (add - on rate) is $I = P\times r\times t$, where $P$ is the principal amount, $r$ is the annual interest rate (in decimal), and $t$ is the time in years.
Given $P=\$39380$, $r = 2.9\%=0.029$, and $t = 5$ years.
$I=39380\times0.029\times5$
First, calculate $39380\times0.029 = 39380\times\frac{29}{1000}=39380\times0.029 = 1142.02$
Then, $1142.02\times5=\$5710.10$

Step2: Calculate Total Amount to Repay

The total amount $A=P + I=39380 + 5710.10=\$45090.10$

Step3: Calculate Monthly Payment

The loan is for 5 years, so the number of months $n = 5\times12=60$ months.
Monthly payment $=\frac{A}{n}=\frac{45090.10}{60}\approx\$751.50$

Life - insurance companies use actuarial science, which involves statistical analysis of groups. The expected remaining lifespan of 23.25 years for a 53 - year - old (Mr. Timmons) means that when we consider a large group of people with similar characteristics (age, profession, risk factors, etc.), the average age at death (53 + 23.25 = 76.25) of this group is 76.25 years. It does not mean that Mr. Timmons will definitely live to 76.25 years (so "Yes, it does" is wrong), nor does it mean he will live longer than 76.25 years (the third option is wrong), and it is not about half of the people living to 76.25 years (the fourth option misinterprets the meaning of the average).

Answer:

Interest = $5710.10; monthly payment = $751.50

Question 11