Life Insurance Problem

Quote:

Originally Posted by lasenzagirl30

could you help me out please?
this is so simple but i think i'm missing out a step or two to solve it.

Nancys life insurance rate is $1.67 per $1000. What will her annual premium be for a $100,000 term life insurance policy for 10 years?

The problem you might be having is that they give you too much information. The "10 years" does not effect the problem whatsoever as it only asks for the annual payment. Therefore you have to focus on the other two remaining facts:

Nancy pays $1.67 for every $1,000 of her life insurance plan.
Her life insurance plan is for $100,000.

So to solve the problem you have to figure out how many "$1,000" go into her insurance plan of "$100,000".

To get this you divide $100,000 by $1,000.

100,000 / 1,000 = 100

Now you know how many 1,000 there are in 100,000.

Finally, you have to find out how much she will pay total. Since she pays $1.67 for every $1,000 and there are 100 $1,000s in her insurance plan you multiply $1.67 by 100.

(IMPORTANT) NOTE: I am assuming that "Nancys life insurance rate is $1.67 per $1000" means that she pays that much each year. If she pays that much for the whole ten years, then you'd have to divide your answer by 10 (10 years) to get the amount she pays each year.