An insurance company is offering a new policy to its customers. Typically, the policy isbought by a parent or grandparent for a child at the child's birth. The purchaser (say, theparent) makes the following six payments to the insurance company:First birthday:Second birthday:Third birthday:Fourth birthday:Fifth birthday:Sixth birthday:$ 890$ 890Future value$ 990$ 850$ 1,090$ 950After the child's sixth birthday, no more payments are made. When the child reaches age65, he or she receives $390,000. The relevant interest rate is 11 percent for the first sixyears and 7 percent for all subsequent years. Find the future value of the payments atthe child's 65th birthday. (Do not round intermediate calculations and round youranswer to 2 decimal places, e.g., 32.16.)

Future value is the value of today money to be received in the future and that includes the deposit…

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

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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 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
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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 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.)
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