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An insurance company is offering a new policy to its customers

Question : An insurance company is offering a new policy to its customers : 2096

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 $ 830 
Second birthday $ 830 
Third birthday $ 930 
Fourth birthday $ 850 
Fifth birthday $ 1,030 
Sixth birthday $ 950 
After the child’s sixth birthday, no more payments are made. When the child reaches age 65, he or she receives $330,000. If the relevant interest rate is 10 percent for the first six years and 7 percent for all subsequent years, what would the value of the deposits be when the policy matures? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

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Finance 1 Year Ago 136 Views
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