An insurance broker calls you and despite your finance professor's warnings, you listen to their offer. The offered insurance product requires you to make payments every four month of $197 and do so for the next 20 years (1st payment is 4 months from today). The insurance product offers to meet your required return of 10 % per year (i.e. effective), and pay interest every four month. What amount of money should the insurance product promise you at the end of 20 years? (Please make sure to use at least up to 6 decimal points for the I/Y input).

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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An insurance broker calls you and despite your finance professor's
warnings, you listen to their offer. The offered insurance product
requires you to make payments every four month of $197 and do so
for the next 20 years (1st payment is 4 months from today). The
insurance product offers to meet your required return of 10 % per year
(i.e. effective), and pay interest every four month. What amount of
money should the insurance product promise you at the end of 20
years? (Please make sure to use at least up to 6 decimal points for the
I/Y input).
Transcribed Image Text:An insurance broker calls you and despite your finance professor's warnings, you listen to their offer. The offered insurance product requires you to make payments every four month of $197 and do so for the next 20 years (1st payment is 4 months from today). The insurance product offers to meet your required return of 10 % per year (i.e. effective), and pay interest every four month. What amount of money should the insurance product promise you at the end of 20 years? (Please make sure to use at least up to 6 decimal points for the I/Y input).
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