A client, age 26, is planning to purchase a $100,000, 20-payment life policy and is deciding whether to pay quarterly or semiannually. Compute the amount the client would save during her lifetime by choosing semiannual payments. Refer to Table 12-1. (1 year = 12 months.)

Semiannual Payments

Payments made twice a year, often used in the context of loan repayments or interest calculations.

Quarterly Payments

Payments made every three months during a fiscal year, often used for taxes, insurance, or interest payments.

Life Policy

An insurance contract that pays a designated beneficiary a sum of money upon the death of the insured person.