Alife insurer owes $550,000 in eight years. to fund this outflow, the insurer wishes to buy strips that mature in eight years. the strips have a $5,000 face value per strip and pay a 6 percent apr with semiannual compounding. how much must the insurer spend now to fully fund the outflow (to the nearest dollar)?

Today, the funder will invest 342,741.82 dollars

Explanation:

We invest on a lump sum of STRIPS which yield 6% with semiannual compounding.

Our target is 550,000 in eight years and each STRIPS is valued at 5,000

The STRIP is the coupon payment or maturity payment of a bond which sales like a zero coupon bond so we need to discount the 550,000 at the market rate to know the market price of the STRIPS:

Maturity  $550,000

time   16.00 (8 years x 2 compounts per year)

rate  0.03 ( 6% annual divide into 2 to get semiannual rate)

PV   342,741.82

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step 2: inventory facility equipment/assets

step 3: create preventive maintenance procedures

step 4: create preventive maintenance schedules

step 5: train your maintenanceteam

step 6: analyze – adjust - improve

or

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step 2 – pm procedure scheduling: efficient use of people and resources

step 3 – pm lubrication engineering

step 4 – pm training: back on the chain gang

step 5 – pm program management plan

step 6 – communicate, communicate, communicate