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28 Sep 2019
An insurance company is offering a new policy. The parent makes the following six payments to the insurance company, and no more payments after child's sixth birthday. When the child reaches age 65, he/she receives a fixed lump-sum amount of X dollars. If the interest rate is 10% for the first 6 years, and 7% for all subsequent years, what is the 'fair' amount of the X? Year Payment 1 $ 2,000 2 0 3 $ 2,000 4 0 5 $ 2,000 6 0 # of years until retirement 65 Interest rate 1 10% # of years 6 Interest rate 2 7% # of years 59
An insurance company is offering a new policy. The parent makes the following six payments to the insurance company, and no more payments after child's sixth birthday. When the child reaches age 65, he/she receives a fixed lump-sum amount of X dollars. If the interest rate is 10% for the first 6 years, and 7% for all subsequent years, what is the 'fair' amount of the X? Year Payment 1 $ 2,000 2 0 3 $ 2,000 4 0 5 $ 2,000 6 0 # of years until retirement 65 Interest rate 1 10% # of years 6 Interest rate 2 7% # of years 59
Beverley SmithLv2
28 Sep 2019
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