Question

24 joshua invests $210,000 into a payout annuity contract that pays him a monthly benefit of $3,500 for a period of 5 years. the insurance company from which joshua purchased the contract became bankrupt. joshua’s agent mentions that his investment is protected by assuris. what is the maximum monthly amount joshua is likely to receive from assuris protection? v2qzujf9tkzntbrthlazw5nhtm1qut09 a. 2000 b. 3500 c. 2625 d. 3150 v2qzujf9tkzntbrthlazw5nhtm1qut09

Explanation:

Step1: Determine total months in 5 years

There are 12 months in a year, so for 5 years, total months \( n = 5\times12 = 60 \) months.

Step2: Calculate total benefit from annuity

The monthly benefit is $3,500, so total benefit over 5 years is \( 3500\times60 = 210000 \).

Step3: Compare with investment

Joshua invested $210,000. The total benefit from the annuity is $210,000, which matches his investment. But we need to find the maximum monthly amount he can receive from Assuris protection. Wait, actually, Assuris protection for annuities: when a company fails, Assuris protects 100% of the promised benefits up to a certain limit? Wait, no, maybe the calculation is: the investment is $210,000, over 5 years (60 months), so monthly amount from Assuris would be total investment divided by total months. So LXI0? Wait, no, wait the annuity pays $3,500 monthly for 5 years, total is 3500*60=210000, which is equal to his investment. But the question is "the maximum monthly amount Joshua is likely to receive from Assuris protection". Wait, maybe the correct approach is: the investment is $210,000, and we need to find the monthly payment over 5 years (60 months) that equals the investment. So monthly payment LXI1? But wait, the options include 3500 as option b. Wait, but let's check again. Wait, the annuity contract pays $3,500 monthly for 5 years, total 210,000, which is his investment. So if the company goes bankrupt, Assuris would protect the investment, so the monthly amount he can receive from Assuris would be such that total over 5 years is his investment. So \( \text{Monthly amount}=\frac{210000}{5\times12}=\frac{210000}{60}=3500 \). Wait, but the options have 3500 as option b. But wait, maybe I made a mistake. Wait, no, let's recalculate: 5 years is 60 months. 210000 divided by 60 is 3500. So the maximum monthly amount from Assuris would be 3500? But wait, the annuity was paying 3500, but maybe Assuris has a different calculation. Wait, no, maybe the correct answer is 3500, but let's check the options. Option b is 3500. Wait, but let's check again. Wait, the investment is $210,000. Over 5 years (60 months), the monthly payment to get back the investment is 210000/60=3500. So that's option b.

Answer:

b. 3500