n 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: $950 Second birthday. $950 Third birthday: $1,050 Fourth birthday: $850 Fifth birthday: $1,150 Sixth birthday: $950 After the child's sixth birthday, no more payments are made. When the child reaches age 65, he or she receives $450,000. The relevant interest rate is 15 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.)

n 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: $950 Second birthday. $950 Third birthday: $1,050 Fourth birthday: $850 Fifth birthday: $1,150 Sixth birthday: $950 After the child's sixth birthday, no more payments are made. When the child reaches age 65, he or she receives $450,000. The relevant interest rate is 15 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.)

SWFT Comprehensive Vol 2020

43rd Edition

ISBN:9780357391723

Author:Maloney

Publisher:Maloney

Chapter5: Gross Income: Exclusions

Section: Chapter Questions

Problem 5DQ

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