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An insurance company is offering a new policy to its customers. Typically, the policy is bought by a 1 answer below » 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: $ 830 Second birthday: $ 830 Third birthday: $ 930 Fourth birthday: $ 930 Fifth birthday: $ 1,030 Sixth birthday: $ 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. Required: If View complete 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 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: $ 830 Second birthday: $ 830 Third birthday: $ 930 Fourth birthday: $ 930 Fifth birthday: $ 1,030 Sixth birthday: $ 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. Required: 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? (Enter rounded answer as directed, but do not use rounded numbers in intermediate calculations. Round your answer to 2 decimal places (e.g., 32.16).) View less » Oct 01 2015 06:23 PM
