Shonetta Woods has a limited payment insurance policy with an annual premium of $1,125.00 until age 65. She pays the premium quarterly at an increased rate of 26.2 percent per quarter. How much money can Shonetta save in one year by paying the premium annually?

Is it $54.00?

Yes, that's what I got, and here's how:

1125(4*.262-1)=54

To calculate how much money Shonetta can save in one year by paying the premium annually, we need to compare the total cost of the quarterly payments with the annual payment.

First, let's calculate the quarterly premium:

Quarterly premium = Annual premium × (1 + increase rate)
Quarterly premium = $1,125.00 × (1 + 26.2%)
Quarterly premium = $1,125.00 × (1 + 0.262)
Quarterly premium = $1,125.00 × 1.262
Quarterly premium = $1,419.75

Now, let's calculate the total cost of quarterly payments in one year (4 quarters):

Total cost of quarterly payments = Quarterly premium × 4
Total cost of quarterly payments = $1,419.75 × 4
Total cost of quarterly payments = $5,679.00

The annual premium is $1,125.00, so if Shonetta pays annually, she will only pay that amount.

Now, let's calculate the amount of money Shonetta can save in one year by paying the premium annually:

Savings = Total cost of quarterly payments - Annual premium
Savings = $5,679.00 - $1,125.00
Savings = $4,554.00

Therefore, Shonetta can save $4,554.00 in one year by paying the premium annually, not $54.00.

To solve this problem, we need to calculate the total amount Shonetta would pay for the insurance premium in one year using both the quarterly and annual payment options.

First, let's calculate the total amount she would pay in one year if she pays the premium quarterly:

1. Find the quarterly premium: $1,125.00 / 4 quarters = $281.25
2. Calculate the increased rate for each quarter: $281.25 * 0.262 = $73.72 (rounded to two decimal places)
3. Calculate the total amount paid in one year: $73.72 * 4 quarters = $294.88

Next, let's calculate the total amount she would pay in one year if she pays the premium annually:

1. Find the annual premium: $1,125.00
2. Calculate the savings by paying annually: Total quarterly payments - Annual payment
-> $294.88 - $1,125.00 = -$830.12

As we can see, when Shonetta pays the premium annually, she actually saves $830.12 in one year, not $54.00. It seems there was an error in your calculation.