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Types of insurance policies with identical coverage

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Your insurance agent offers you two types of insurance policies with identical coverage. The premiums are as follows:

Policy A: $800 per years for 10 years

Policy B: $600 per year for 5 years.

$1100 per year for the remaining 5 years.

Assume the payments are made at the beginning of each year. Using an interest rate of 8%, which is the lowest cost policy?

Reference no: EM132323792

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