The amount of the lump sum that the insurance company must put into a bank account is $6,928,571.43 option (B) is correct.
It's the ratio of two integers stated as a fraction of a hundred parts. It is a metric for comparing two sets of data, and it is expressed as a percentage using the percent symbol.
We have:
Gertrude has a life insurance policy that will pay her family $97,000 per year.
If interest rates are at 1.4% when the insurance company has to pay
r = 1.4%
or
r = 0.014
The amount of the lump sum that the insurance company must put into a bank account:
= 97,000/0.014
= 6928571.429 ≈ $6,928,571.43
Thus, the amount of the lump sum that the insurance company must put into a bank account is $6,928,571.43 option (B) is correct.
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