Problem $12-16$ Determining the Cost of Insurance $[$LO$12-5]$

Suppose you are $30$ and have a $$115,000$ face amount, $20-$year, limited$-$payment,

participating policy $($dividends will be used to build up the cash value of the

policy$).$ Your annual premium is $$1,035.$ The cash value of the policy is expected to be

$$4,600$ in $20$ years. Using time value of money and assuming you could invest your

money elsewhere for a $7$ percent annual yield, calculate the net cost of insurance. Use

$($Exhibit $1-$A$,$ Exhibit $1-$B$,$ Exhibit $1-$C$,$ Exhibit $1-$D$)$

Note: Use appropriate factor$($s$)$ from the tables provided. Do not round intermediate

calculations. Round time value factor to $3$ decimal places and final answer to the

nearest whole number.

Net cost of insurance