An insurance company is offering a new policy to its customers. Typically, the policy is bought by a parent or grandparent for a child at the child's birth. The details of the policy are as follows: The purchaser (say, the parent) makes the following six payments to the insurance company:

First birthday: $800
Second birthday:800
Third birthday: 900
Fourth birthday: 900
Fifth birthday: 1,000
Sixth birthday: 1,000

After the child's sixth birthday, no more payments are made. When the child reaches age 65, he or she receives $190,000. The relevant interest rate is 10 percent for the first 6 years and 6 percent for all subsequent years.

I don't see a question, just statements of fact.

To calculate the future value of the policy, we need to use the concept of present value and compound interest.

Step 1: Calculate the present value of the 6 payments made by the parents to the insurance company. To do this, we need to discount each payment using the relevant interest rate. The relevant interest rate for the first 6 years is 10 percent.

To calculate the present value of the first payment at the child's first birthday ($800):

PV_1 = $800 / (1 + 0.10)^1 = $727.27

Similarly, calculate the present value of the remaining payments:

PV_2 = $800 / (1 + 0.10)^2 = $661.16
PV_3 = $900 / (1 + 0.10)^3 = $676.28
PV_4 = $900 / (1 + 0.10)^4 = $618.44
PV_5 = $1,000 / (1 + 0.10)^5 = $620.92
PV_6 = $1,000 / (1 + 0.10)^6 = $564.02

Step 2: Calculate the accumulated value of the present values from step 1. To do this, we need to compound the present values using the relevant interest rate. The relevant interest rate for all subsequent years (after the child's sixth birthday) is 6 percent.

Accumulated Value = PV_1 * (1 + 0.06)^59 + PV_2 * (1 + 0.06)^58 + PV_3 * (1 + 0.06)^57 + PV_4 * (1 + 0.06)^56 + PV_5 * (1 + 0.06)^55 + PV_6 * (1 + 0.06)^54

Step 3: Add the accumulated value from step 2 to the child's 65th birthday payment to find the future value.

Future Value = Accumulated Value + $190,000

Now, let's calculate the values:

PV_1 = $800 / (1 + 0.10)^1 = $727.27
PV_2 = $800 / (1 + 0.10)^2 = $661.16
PV_3 = $900 / (1 + 0.10)^3 = $676.28
PV_4 = $900 / (1 + 0.10)^4 = $618.44
PV_5 = $1,000 / (1 + 0.10)^5 = $620.92
PV_6 = $1,000 / (1 + 0.10)^6 = $564.02

Accumulated Value = PV_1 * (1 + 0.06)^59 + PV_2 * (1 + 0.06)^58 + PV_3 * (1 + 0.06)^57 + PV_4 * (1 + 0.06)^56 + PV_5 * (1 + 0.06)^55 + PV_6 * (1 + 0.06)^54

Future Value = Accumulated Value + $190,000

Finally, substitute the values of PV_1, PV_2, PV_3, PV_4, PV_5, PV_6, and Accumulated Value in the equation to get the Future Value.