An insurance company is offering a new policy to its customers Typically, the policy is bought by a parent or grandparent for a child at the childs birth The details of the policy are as follows The purchaser (say, the parent) makes the following six payments to the insurance company First birthday $ 860 Second birthday $ 860 Third birthday $ 960 Fourth birthday $ 960 Fifth birthday $ 1,060 Sixth birthday $ 1,060 After the childs sixth birthday, no more payments are made When the child reaches age 65, he or she receives $120,000 If the relevant interest rate is 9 percent for the first six years and 5 percent for all subsequent years, what is the value of the policy at the child's 65th birthday (Do not round intermediate calculations and round your answer to 2 decimal places, e g , 32 16 )

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Question: An insurance company is offering a new policy to its customers. Typically, the policy is bought by a parent or grandparent for a child at

An insurance company is offering a new policy to its customers. Typically, the policy is bought by a parent or grandparent for a child at the childs birth. The details of the policy are as follows: The purchaser (say, the parent) makes the following six payments to the insurance company:


First birthday:	$	860
Second birthday:	$	860
Third birthday:	$	960
Fourth birthday:	$	960
Fifth birthday:	$	1,060
Sixth birthday:	$	1,060

After the childs sixth birthday, no more payments are made. When the child reaches age 65, he or she receives $120,000.

If the relevant interest rate is 9 percent for the first six years and 5 percent for all subsequent years, what is the value of the policy at the child's 65th birthday? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

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