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. For this policy, thepurchaser (say, the parent) makes the following six payments to the insurance company:First birthdaySecond birthdayThird birthdayFourth birthdayFifth birthdaySixth birthday$780$780$880$850$980$950After the child's sixth birthday, no more payments are made. When the child reaches age65, he or she receives $280,000. If the relevant interest rate is 10 percent for the first sixyears and 7 percent for all subsequent years, what would the value of the deposits bewhen the policy matures? (Do not round intermediate calculations and round youranswer to 2 decimal places, e.g., 32.16.)

Variables in the question: BirthdayPayment ($)1st7802nd7803rd8804th8505th9806th950Rate for the…

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

Please help answer all using typing as from one subpart.
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
Zebulon wants to borrow money. He writes a note that guarantees that 360 days from now he will give an amount of $1818.00 to whoever brings back the note to him. Yolanda wants to invest. She ourchases the note from Zebulon. She pays $1800. After 30 days, Yolanda sells the notes to Walter for $1679.45. Walter keeps the note until maturity. (a) What is the simple interest rate earned by Yolanda? Note that negative rates may occur. When this happens it means that Yolanda lost money :( (b) What is the simple interest rate earned by Walter? (c) What is the simple interest rate at which Zebulon borrowed?
On the day you were born, your parents opened than the amount deposited in the previous year Immediately after your parents make the deposit on your 18th birthday, the amount of money in your savings account will be closest to which of the following? OA $80,839 OB $27,958 OC. $99,002 a college savings account with an initial deposit of $2.200 On every one of your birthdays since, your parents have made an additional deposit that is 3% larger The account eams 6.7% interest annually OD $30,000 OE $29,050 The deposit made on your 18th birthday will be the final deposit made into the account You plan on using the balance in the account to fund your college education You will be attending a 4-year institution and you will assume that tuition costs will remain constant over the next four years. If the first annual tution payment wit be made on your 19th birthday, what is the maximum annual tabon expense that the balance in your account can sustain if you plan on attending college for four…
Susan and Derick finalized an adoption in 2020. Their adoption fees totaled $10,000. They have AGI of $238,520 for 2020. What is their adoption credit? a. $4,000 b. $10,000 c. $7,263 d. $14,300
Joelle prefers to pay by credit card, but her card was declined. She B returns home to call her bank. They informed her that her credit limit using this card is $300. The credit card she has currently charges a 19.2% annual interest rate compounded monthly. The table to the right shows the balance, 8, of her account after m months. 100 119.2 142.09 169.37 4 201.89 15 240.65 286.85 Question 2A: Based on the information given, why might Joelle not have been able to use her credit card at Target? Part B: For each time period below, determine the rate of change: month 1 to month 2 month 2 to month 3 month 4 to month 6 month 3 to month 5 The time period with the greatest rate of change is: Part C: What do you notice about the average rate of change in this scenario? What does this indicate about the function we are working with? Please explain your response.
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.)
Which of the following choices is considered as an annuity? Explain. a. Niall gets $10 this year and $20 next b. Rexha gets $10 in 3 months and $10 6 months later c. Taylor gets $50 in 6 months and $20 6 months later d. Nina gets $100 every year for the rest of her life
Elisa needs money to repair her home air conditioner, so she pawns her bicycle. The pawnbroker loans Elisa $270. Seventeen days later, Elisa gets her bicycle back by paying the pawnbroker $303.15. What annual simple interest rate did the pawnbroker charge Elisa? Assume 360 days in a year The pawnbroker charged Elisa a simple interest rate of enter your response here
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…
The Bowers have a mortgage with National Trust Bank. The bank requires that the Bowers pay their homeowner’s insurance, property taxes, and mortgage in one monthly payment to the bank. Their monthly mortgage payment is $1,500.00. Their semi-annual property tax bill is $6,250.00. Their annual homeowner’s insurance bill is $1,200.00. How much is the monthly payment they make to National Trust? $2642.00
I need the answer as soon as possible

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