Your client would like a $1 million life insurance policy with the following relevant information:

Premium: $10,000 per year

Expected dividends per year: $800

Cash value 20 years from now: $125,000

Discount rate: 5%

a. Given this information, compute the Net Cost of the policy over the next 20 years. Compute the cost per year, per $1,000 of coverage. (3 points)

b. Compute the policys Interest-Adjusted Cost over the next 20 years, per year, per $1,000 of coverage. (4 points)

c. Suppose the cash value at the end of the most recent (previous) year is $2,300, and the cash value at the end of the current year will be $5,000. Compute the policys cost per $1,000 of coverage using the Benchmark Method.