Questions: Carmen has selected to receive 10,000 per month until the principal and interest on her husband's life insurance policy have been paid out. Select one: a. the fixed-amount option b. the fixed-period option c. the interest-only option d. the life income option

Carmen has selected to receive 10,000 per month until the principal and interest on her husband's life insurance policy have been paid out.

Select one:
a. the fixed-amount option
b. the fixed-period option
c. the interest-only option
d. the life income option

Transcript text: Carmen has selected to receive $\$ 10,000$ per month until the principal and interest on her husband's life insurance policy have been paid out. Select one: a. the fixed-amount option b. the fixed-period option c. the interest-only option d. the life income option

Solution

Solution Steps

To determine which option Carmen has selected, we need to understand the characteristics of each option provided. The fixed-amount option involves receiving a specific amount of money regularly until the total amount (principal and interest) is exhausted. Given that Carmen is receiving $10,000 per month, this matches the description of the fixed-amount option.

Solution Approach

Carmen has selected the fixed-amount option.

Step 1: Understanding the Options

We need to determine which option Carmen has selected based on the given choices:

(a) the fixed-amount option
(b) the fixed-period option
(c) the interest-only option
(d) the life income option

Step 2: Analyzing Carmen's Choice

Carmen has chosen to receive $\$10,000$ per month until the principal and interest on her husband's life insurance policy have been paid out. This description matches the fixed-amount option, where a specific amount is received regularly until the total amount (principal and interest) is exhausted.