An insurance company is offering a new policy to its customers. Typically, the policy is bought...

 

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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 child's 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: Second birthday: Third birthday: Fourth birthday: Fifth birthday: Sixth birthday: $930 $ 1,030 $ 1,030 After the child's sixth birthday, no more payments are made. When the child reaches age 65, he or she receives $380,000. If the relevant interest rate is 11 percent for the first six years and 7 percent for all subsequent years, what is the value of the policy at the child's 65th birthday? Note: Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16. Child's 65th birthday $830 $ 830 $ 930 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 child's 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: Second birthday: Third birthday: Fourth birthday: Fifth birthday: Sixth birthday: $930 $ 1,030 $ 1,030 After the child's sixth birthday, no more payments are made. When the child reaches age 65, he or she receives $380,000. If the relevant interest rate is 11 percent for the first six years and 7 percent for all subsequent years, what is the value of the policy at the child's 65th birthday? Note: Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16. Child's 65th birthday $830 $ 830 $ 930

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The value of the policy at the childs 65th birthday is 380000 detailed explanation The value of the ... View the full answer