Explore BrainMass

Explore BrainMass

    Insurance Policy Value

    This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

    A well-known insurance company offers a policy for children. Typically, a parent or grandparent buys a policy for a child at the child's birth. the details of the policy are as follows. The purchaser makes the following six payments to the insurance company:

    1st birthday: $750
    2nd birthday: $750
    3rd birthday: $750
    4th birthday: $800
    5th birthday: $800
    6th birthday: $800

    No more payments are made after the child's sixth birthday. When the child reaches the age of 65, he or she receives $250,000. If the relevant interest rate is 6% for the first 6 years and 7% for all subsequent years, is the policy worth buying? (Must use Microsoft Excel)

    © BrainMass Inc. brainmass.com June 3, 2020, 8:29 pm ad1c9bdddf

    Solution Summary

    This solution uses Microsoft Excel to derive at the value of an insurance policy.