An 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 details of the policy are as follows: The purchaser (say,

the parent) makes the following six payments to the insurance company:

First birthday:

$

800

Second birthday:

$

800

Third birthday:

$

800

Fourth birthday:

$

900

Fifth birthday:

$

1,000

Sixth birthday:

$

1,000

After the child's sixth birthday, no more payments are made. When the child reaches age 65, he or she

receives $150,000.

Required:

If the relevant interest rate is 10 percent for the first six years and 5.75% percent for all subsequent years, what

is the value of the policy at the child's 65th birthday?