To determine the annual premium for a \[tex]$110,000 5-year term policy for a 22-year-old female using the provided table, we will follow these steps:
1. Identify the annual premium per \$[/tex]1,000 of face value:
According to the table, the annual premium for a 22-year-old female for a 5-year term policy is \[tex]$2.22 per \$[/tex]1,000 of face value.
2. Determine the face value of the policy in thousands:
The face value of the policy is \[tex]$110,000. To convert this to thousands, we divide by 1,000:
\[
\frac{110,000}{1,000} = 110
\]
Therefore, the face value in thousands is 110.
3. Calculate the total annual premium:
Multiply the annual premium per \$[/tex]1,000 by the face value in thousands:
[tex]\[
2.22 \times 110 = 244.20
\][/tex]
4. Round the result to the nearest cent:
The calculated premium, \[tex]$244.20, is already rounded to the nearest cent. Thus, we need not make further adjustments.
So, the annual premium for a \$[/tex]110,000 5-year term policy for a 22-year-old female is \[tex]$244.20.
Comparing the calculated result with the options provided:
- a. \$[/tex]280.50
- b. \[tex]$244.20
- c. \$[/tex]253.00
- d. \[tex]$236.50
The best choice is b. \$[/tex]244.20.
