An insurance company is offering a new policy to its customers. Typically, the policy is bought by a parent or grandparent for a child atthe child's birth. The details of the policy are as follows: The purchaser (say, the parent) makes the following six payments to theinsurance company:First birthday:Second birthday:Third birthday:Fourth birthday:Fifth birthday:Sixth birthday:$ 920$ 920$1,020$ 1,020$ 1,120$ 1,120After the child's sixth birthday, no more payments are made. When the child reaches age 65, he or she receives $430,000.If the relevant interest rate is 12 percent for the first six years and 7 percent for all subsequent years, what is the value of the policy atthe 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

Value of Policy = Present value of future cash flows..Present Value = Present value factor x Future…

Answered: An insurance company is offering a new…

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

Problem 1PS

See similar textbooks

Similar questions

As an insurance agent, use tables Table 19-6 and Table 19-7 to calculate the annual premium (in $) for the client. Name: Denner Territory Driver Class Bodily Injury Property Damage Model Class 2 2 100/300 50 C Vehicle Age Comprehensive Deductible Collision Deductible Rating Factor Annual Premium 4 $100 $250 none $
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: 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 $930 $ 1,030 $ 1,030
Vikrambhai
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 (say, the parent) makes the following six payments to the insurance company: First birthday: Second birthday: Third birthday: Fourth birthday: Fifth birthday: Sixth birthday: $ 880 $ 880 $980 $850 $ 1,080 $950 After the child's sixth birthday, no more payments are made. When the child reaches age 65, he or she receives $380,000. The relevant interest rate is 11 percent for the first six years and 7 percent for all subsequent years. Find the future value of the payments at the child's 65th birthday. (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Future value
Kia deposited $1,100, at the BEGINNING of each year for 25 years in a credit union account. If the account paid 8% interest, compounded annually, use the appropriate formula to find the future value of her account. A. $73,441.24 B. $80,416.53 C. $86,849.86 D. $87,949.86
9. Define out of pocket maximum. a. A flat-rate fee you must pay when receiving any kind of health care service. b. The maximum amount of money your insurance will cover of a certain health care service. c. The maximum amount you will have to pay out of pocket in one year for the benefits your insurance covers. d. The maximum amount of money the insured party will pay toward prescription medications.
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 (say, the parent) makes the following six payments to the insurance company First birthday: Second birthday Third birthday: Fourth birthday Fifth birthday: Sixth birthday. $ 800 $800 $ 900 $ 900 Future value $1,000 $ 1,000 After the child's sixth birthday, no more payments are made. When the child reaches age 65, he or she receives $350,000. The relevant interest rate is 10 percent for the first six years and 7 percent for all subsequent years. Calculate the future value of the payments at the child's 65th birthday. (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
A patient's total surgery charges are $1,278. The patient must pay the annual deductible of $1,000, and the policy states a 80-20 coinsurance. What does the patient owe?
What is the Schedule A deduction for interest expense? Paul paid interest to his lenders as follows: Primary home mortgage $7,200 Home-equity loan 435 (not acquisition debt) Credit cards 498 Car loan 390 Primary home mortgage Home-equity loan Credit cards Car loan
Determine the amount of the child- and dependent-care credit to which each of the following taxpayers is entitled. If an amount is zero, enter "0". Round intermediate computations and final answer to the nearest dollar. Note: Round your percentage computations up to the next whole number before using in credit dollar amount computations. a. Caryle and Philip are married and have a 4-year-old daughter. Their adjusted gross income is $47,600, and they pay $2,300 in qualified child-care expenses during the year. Caryle earns $17,100, and Philip earns $30,500 in salary. $fill in the blank 1 b. Natalie is a single parent with an 8-year-old son. Her adjusted gross income is $25,000, and she pays $3,190 in qualified child-care expenses. $fill in the blank 2 c. Leanne and Ross are married and have three children, ages 6, 4, and 1. Their adjusted gross income is $77,000, and they pay $6,340 in qualified child-care expenses during the year. Leanne earns $47,600, and Ross earns…
On May 4 Ariel signed a simple discount note for $3,500 at 31/2% for 60 days. Use the simple interest formula to calculate the amount of interest Ariel will pay using ordinary interest.
2. Using Table 19-5 and 19-6, find the annual premium for an automobile insurance policy for Sandra who has a good credit rating. She lives in Territory 1 and buys 50/100/50 coverage for her liability protection. Sandra's vehicle is Model Class 2 and is five years old. In addition to the liability coverage, she purchased comprehensive and collision insurance with a $250 deductible on comprehensive and a $500 deductible on collision. TABLE 19-5 Annual Automobile Liability Insurance Premiums Territory 1 Territory 2 Liability Limits* GOOD ОСС BAD GOOD ОСС BAD 50/100/50 385 600 846 354 552 778 100/300/100 425 682 961 391 627 884 250/500/250 460 750 1036 423 690 953 500/1000/500 530 843 1208 488 776 1111 GOOD = good credit; OCC = occasional payments past 30 days; BAD = judgments, collection, bankruptcy "Bodily injury maximum for one person/Total bodily injury coverage per accident/Property damage TABLE 19-6 Annual Auto Insurance Premium Rates for Comprehensive and Collision Territory 1…

SEE MORE QUESTIONS

Recommended textbooks for you

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Foundations Of Finance

Finance

ISBN:

9780134897264

Author:

KEOWN, Arthur J., Martin, John D., PETTY, J. William

Publisher:

Pearson,

Fundamentals of Financial Management (MindTap Cou…

Finance

ISBN:

9781337395250

Author:

Eugene F. Brigham, Joel F. Houston

Publisher:

Cengage Learning

Corporate Finance (The Mcgraw-hill/Irwin Series i…

Finance

ISBN:

9780077861759

Author:

Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor

Publisher:

McGraw-Hill Education

SEE MORE TEXTBOOKS