I need help figuring this out.
Dave purchased a $24000 life insurance policy at the price of $31 per $1000 of coverage. If he pays the premium quarterly, how much is each installment?
Cost = $31/$1000 * $24000 = $744
Quarterly payment = $744 / 4 = $186
One cannot determine the answer, since you did not say whether Orr was $31 per month, quarter or annum, etc.!
The mathematical information is:
Coverage: $24000 policy
Pooicy Price: $31 per $1000 of coverage ( I will assume that this is the entire cost per $1000 of policy face value.
Total policy cost is $31 * ($24000/$1000) or $31 * 24 = $744
The policy cost is paid in installment quaterly or every 3 months. (I assume the cost is paid in one year. The duration of quarterly payments is NOT specified!) Therefore the policy cost is paid in 4 equal payments.
Installment Payment = $744 / 4 = $186 every 3 months for 1 year.