Suppose you are 40 and have a $125,000 face amount, 10-year, limited-payment, participating policy (dividends will be used to build up the cash value of the policy). Your annual premium is $1,125. The cash value of the policy is expected to be $5,000 in 10 years. Using time value of money and assuming you could invest your money elsewhere at an annual yield of 6 percent, calculate the net cost of insurance. Use Exhibit 1-B. (Do not round intermediate calculations. Round time value factor to 3 decimal places and final answer to the nearest whole number.)

Exhibit 1-B Future value (compounded sum) of $1 paid in at the end of each period for a given number of time periods (an annuity) 2% 9% 6.105 7.523 11.028 13.021 10.58311027 10.159 11.027 11.491 10 10.462 18.531 15.026 16.627 18.292 20.141 22.953 26.019 15.618 17.713 24.523 14.947 30.095 15 16.097 27.152 34.405 23.657 33.003 36.974 41.301 46.018 23.698 28.213 40.545 44.501 18 28.132 30.539 27.671 29.778 41.446 56.939 64.203 114.413 20 36.786 57.275 28.243 36.459 47.727 54.865 63.249 84.701 164.494 442.593 30 40.568 113.283 75.401 60.402 95.026 154. 72 337.882 209.348 290.336 815.084 17% 3.407 368 766 7.442 536 089 16.499 17.519 18.285 32.824 42.219 54.841 86.949 60.965 72.035 87.442 05.931 167.286 66.649 138.109 173.636 218.045 273.556 342.945 1054.791 3227.174 30088.655 65.075 96.022 285.014 70.749 78.969 98.603 110.285 154.74 186.688 471.981 1181.882 7343.858 102.444 212.793 434.745 1779.09 80.947 146.628 342.603 790.948 4163.213 165.418 133.334 181.871 356.787 1342.025 292.105 647.439 3134.522 2348.803 8729.985 120392.883 530.312 30 767.091 1013.704 1 2360.757 5529.829