Hello. I cannot solve the following problem as I cannot "see" what it is asking for in terms structuring properly an argument based on the formulas. Essentially I would like for someone to explain in english what is really going on, and then from this point I probably will be able to see the solution.

Problem

On January 1, an insurance company has 100,000 which is due to Linden as a life insurance death benefit. He chooses to recieve the benefit annually over a period of 15 years, with the first payment immediately. The benefit he receives is based on an effective interest rate of 4% per annum.

The insurance company earns interest at an effective rate of 5% per annum. Every July 1, the company pays 100 in expenses and taxes to maintain the policy. At the end of nine years, the company has X remaining.

Calculate X.

Ans. Choices: a. 46000, b. 47100, c. 47,700, d. 52,800, e. 53900

Thank you.

Problem

On January 1, an insurance company has 100,000 which is due to Linden as a life insurance death benefit. He chooses to recieve the benefit annually over a period of 15 years, with the first payment immediately. The benefit he receives is based on an effective interest rate of 4% per annum.

The insurance company earns interest at an effective rate of 5% per annum. Every July 1, the company pays 100 in expenses and taxes to maintain the policy. At the end of nine years, the company has X remaining.

Calculate X.

Ans. Choices: a. 46000, b. 47100, c. 47,700, d. 52,800, e. 53900

Thank you.

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