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:$ 760$760$ 860$ 860$ 960$ 960Fifth birthday:Sixth birthday:After the child's sixth birthday, no more payments are made. When the child reaches age 65, he or she receives $360,000if 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 55th birthday

Variables in the question: DescriptionPayments ($)First birthday760Second birthday760Third…

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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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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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.
Travis Thompson uses his credit card to obtain a cash advance of $600 to pay for his textbooks in medical school. The interest rate charged for the loan is 0.04386% per day. Travis repays the money plus the interest after 30 days. a) Determine the interest charged for the cash advance. b) When he repaid the loan, how much did he pay the credit card company?
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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