Gce Model Questions Vol1 2017 Commerce Question 8

Practice objective / multiple choice question 8 from the 2017 Gce Model Questions Vol1 Commerce examination.

Gce Model Questions Vol1 2017 Commerce Objective / Multiple Choice Medium Difficulty
Question 8 GCE_MODEL_QUESTIONS_VOL1 • 2017 • COMMERCE • objective

A whole‑life insurance policy provides a sum assured of \(\text{₦}1,200,000\). The annual premium is \(\text{₦}48,000\) payable at the start of each year. The policy guarantees a surrender value equal to 30 % of the total premiums paid, provided the policy has been in force for at least 5 years. If the policyholder surrenders the policy after 7 years, calculate the surrender value and state the net gain or loss compared with the total premiums paid.

Answer Options

A. Surrender value = ₦360,000; gain of ₦24,000 compared with premiums paid.
B. Surrender value = ₦86,400; loss of ₦249,600 compared with premiums paid.
Correct Answer C. Surrender value = ₦100,800; loss of ₦235,200 compared with premiums paid.
D. Surrender value = ₦72,000; loss of ₦264,000 compared with premiums paid.
Correct Answer
C
Correct Option:
Surrender value = ₦100,800; loss of ₦235,200 compared with premiums paid.

About This Question

This is Gce Model Questions Vol1 2017 Commerce Question 8. It is one of the objective questions from the 2017 Gce Model Questions Vol1 Commerce examination.

Difficulty level: Medium .

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