Answer:
$1280000
Step-by-step explanation:
Given that :
John has a life insurance policy that will pay his family $32,000 per year if he dies
If interest rates are at 2.5% when the insurance company has to pay
The amount of the lump sum that the insurance company must out into a bank account can be determined by the division of the amount to be paid by the interest rate.
i.e
the amount of the lump sum = $32000/2.5%
the amount of the lump sum = $32000/0.025
the amount of the lump sum = $1280000
