Question

Tom Harris, a young father, is twenty-four years old. He wishes to purchase $7,000 of a ten-year term insurance. What will be his annual premium?

Answer 1

It would just be 4.15 times 7 which is 29.05

Answer 2

The annual premium will be $29.05.

Explanation:

Consider the provided information.

Tom Harris, a young father, is twenty-four years old and wishes to purchase $7,000 of ten-year term insurance.

in order to solve this, first, find the age of the person and the insurance rate under the correct policy.

For a 24-year-old rate is 4.15.

Now, calculate the face value of the policy:

Divide 7,000 with 1000 which gives 7.

Now simply multiply 7 with 4.15 which gives $29.05

Hence, the annual premium will be $29.05.