We need to find the FV of the premiums to compare with the cash payment promised at age 65. We have to find the value of the premiums at year 6 first since the interest rate changes at that time. So:

FV₁ = $500(1.10)⁵ = $

FV₂ = $600(1.10)⁴ = $

FV₃ = $700(1.10)³ = $

FV₄ = $800(1.10)² = $

FV₅ = $900(1.10)¹ = $

Value at Year 6 = $FV1 + FV2 + FV3 + FV4 + FV5 + 1000

Value at Year 6 = Y

Finding the FV of this lump sum at the childs 65^th birthday:

Future Value = $ Y (1.07)⁵⁹ = $