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The NewLife Insurance Company is offering an insurance policy that will give you and your offspring $18,000 per year forever. a. If you require 6%
The NewLife Insurance Company is offering an insurance policy that will give you and your offspring $18,000 per year forever. a. If you require 6% return on investment the how much would you have to pay for the policy? b. If in part a. above, the cost of the policy was $360,000, what would you expect the interest rate to be for this to be a fair deal? c. You're considering getting a loan. Bank A charges 15% annually and Bank B charges 15.25% accrued semi-annually. Which bank has the lower effective | rate of interest? d. Payments are made on a 15-year annuity of $1500 at the end of each month. Calculate the present value if the interest rate is 11% compounded monthly for the first 7 years and 7 percent compounded monthly thereafter. Answer Place only your final answer in the box. Show your work below (you must show all calculations used to derive you answers)
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