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What is the value of insurance possible

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Question - Ratu buys an insurance policy for his son, Waqa, when Waqa is born. Ratu makes the following payments:

First birthday $800

Second birthday $800

Third birthday $800

Fourth birthday $900

Fifth birthday $1000

Sixth birthday $1000

After the sixth birthday no payments are made. When Waqa reaches 65 years of age, the insurance company pays $150000. Assuming the relevant interest for the first 6 years is 10% and 5.75% thereafter, what is the value of insurance possible at age 65?

A. $155,000

B. $200,678

C. $178,792

D. $152,877

Reference no: EM133019361

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