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Add it under your homeowners. If you have it.
In that case, insurance is fairly valued at $20 a month- they're giving you a 14% chance of losing the ring in the next 50 years.
Just make sure you do get insurance. Took us a major freak out when it went flying off one time before we actually got insurance
NPV of 50 years of $240 a year at 7% discount rate is ~ $2400. That divided by the rings value gives you the break even point for the insurer (if they pay out on more than 14% of customers, they'd lose money). With their overhead, and profit motive, they are actually expecting to pay out on less than 14% of the time but it's a good approximation.
Or renter insurance
How much is the ring? I got $10k for 12 a month a jewelers mutual
The ring was appraised at $17K.
Thanks for the calculation A2, that puts things into perspective. Could you walk me trough how you arrived at that 14% number?
Thanks for the explanation, it's been a while for me since finance courses!
So proud of A2- nice to see a skill set used for good!
Where did the 7% discount rate come from?