Problem 6.70 – Value of an Insurance Policy at Maturity with Different Interest Rates

Fundamentals of Corporate Finance

Ross, Westerfield, and Jordan

13th Edition

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Difficulty – Hard

Evaluate the value of an insurance policy at the child's 65th birthday, where a parent or grandparent makes six payments on the child's first six birthdays. After the sixth birthday, no more payments are made, and the child receives a specific amount at age 65. Consider different interest rates for the first six years and all subsequent years.

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