An insurance company is offering a new policy to its customers. Typically, the policy is bought...

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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 fo

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Answer 1

Answer #1

Rate =10% for first 6 years
The future value of payments at age 6
=870*(1+10%)^5+870*(1+10%)^4+970*(1+10%)^3+850*(1+10%)^2+1070*(1+10%)^5+950=7667.7264

FV of Payment at age 65 =7667.7264*(1+7%)^59 =415249.86

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Answer 2

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