The Tigerthan family has a bas
January 18th, 2023
- The Tigerthan family has a basic health insurance plan thatpays 85 percent of supplementary medical expenses after adeductible of $300.0 per person. If three family members haveprescription drug and other insured expenses of $1,980, $4,500, and$2390, respectively, how much will the Tigerthans and the insurancecompany each pay? [2 pts] (Show your calculations)
- Naden Lucki pays $9,500 for an investment that pays anannual dividend of $500. The investment has a face value of15,000 payable on the maturity date. If Naden holds the investmentuntil its maturity date in 2023 (3 years’ times), what will be herholding return (%) on investment? What will be the annualizedreturn on her investment? (Show your calculations)
- Jack Linton purchased 100 shares of stock for $25.0 per share.During the year, he received cash dividend amounting to $200. Afterfour years, Jack sold the stock for $45.0 per share. What was hisholding period return (%)? What was Jack’s annualized return on thestock? What is the dollar amount of Jack’s return? (Show yourcalculations)
- Emily DiDonato is considering buying stock on margin. She wantsto buy $85,000 in stock; she will put 30% down and borrow theremaining $59,500 at 10% interest. (a) if Emily’s investment goesup by 45 percent after one year, and she pays off her loan, howmuch will she make in dollars? What percent rate of return doesthis represent? (b) If Emily’s investment instead drops by 18percent, how much will she lose in dollars? In terms of apercentage loss how much will she lose? [6 pts] (Show yourcalculations)
Answer:
Tigerthan Family
| Description | Tigerthan Family Member 1 | Tigerthan Family Member 2 | Tigerthan Family Member 3 |
| Drug and other insured expenses | $1,980.00 | $4,500.00 | $2,390.00 |
| Deduction of $300 per person | $300.00 | $300.00 | $300.00 |
| Total Amount | $1,680.00 | $4,200.00 | $2,090.00 |
| Insurance Company will pay 85 percent of supplementary medicalexpenses | 85% | 85% | 85% |
| Amount that Tigerthan family will get from InsuranceCompany | $1,428.00 | $3,570.00 | $1,776.50 |
| Total amount that insurance company will pay to Tigerthanfamily is $6,774.50 |
Naden Lucki
| Naden Lucki InitialInvestment | $9,500 | |
| Annual dividend | $500 | |
| Face value payable on the maturitydate | $15,000 | |
| Maturity time | 3 | |
| Holding return (%) oninvestment | {Income + (End Of Period Value −Initial Value)}/ Initial Value | |
| Holding return (%) oninvestment | {Annual dividend + (Face value payableon the maturity dat − Naden Lucki Initial Investment)}/Naden LuckiInitial Investment | |
| Holding return (%) oninvestment | {500 +(15,000-9,500)}/9,500 | |
| Answer | Holding return (%) oninvestment | 63.16% |
| Annualized return on herinvestment | (Holding return (%) on investment +1)*1/maturity timeperiod -1 | |
| Annualized return on herinvestment | (0.6316+1)*1/3 -1 | |
| Annualized return on herinvestment | 0.177256867 | |
| Answer | Annualized return on herinvestment | 17.73% |
Jack Linton
| Jack Linton InitialInvestment($25*100shares) | $2,500 | |
| Annual dividend | $200 | |
| Selling price ofStock($45*100shares) | $4,500 | |
| Maturity time | 4 | |
| Holding return (%) oninvestment | {Income + (End Of Period Value −Initial Value)}/ Initial Value | |
| Holding return (%) oninvestment | {Annual dividend + (Face value payableon the maturity dat − Naden Lucki Initial Investment)}/Naden LuckiInitial Investment | |
| Holding return (%) oninvestment | {200 +(4,500-2,500)}/2,500 | |
| Answer | Holding return (%) oninvestment | 88.00% |
| Annualized return on herinvestment | (Holding return (%) on investment +1)*1/maturity timeperiod -1 | |
| Annualized return on herinvestment | (0.88+1)*1/4 -1 | |
| Annualized return on herinvestment | 0.170952997 | |
| Answer | Annualized return on herinvestment | 17.10% |
| Answer | $ amount of Jack return is | $2,800 |
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