Question: Problem 6 . 7 0 : Future Value and Multiple Cash Flows: An insurance company is offering a new policy to its customers. Typically, the

Problem

6.70

: Future Value and Multiple Cash Flows: 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 purchaser makes the following six payments to the insurance company: 'Input'

After the child's

6

th birthday, no more payments are made. When the child reaches age

65,

he or she receives $

350, 000 .

If the relevant interest rate is

10 %

for the first six years, and

7 %

for all subsequent years, is the policy worth buying?

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