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. $ 760 First birthday: Second birthday: Third birthday: Fourth birthday: Fifth birthday: Sixth birthday: $ 760 $ 860 $ 860 $ 960 $.960 After the child's sixth birthday, no more payments are made. When the child reaches age 65, he or she receives $360,000 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 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
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. $ 760 First birthday: Second birthday: Third birthday: Fourth birthday: Fifth birthday: Sixth birthday: $ 760 $ 860 $ 860 $ 960 $.960 After the child's sixth birthday, no more payments are made. When the child reaches age 65, he or she receives $360,000 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 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
Chapter7: Tax Credits
Section: Chapter Questions
Problem 4MCQ
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