Suppose your annual premium for a $30,000,20-year limited-payment policy is $675 over the 20-year period.The cash value of your policy at the end of the 20 years is $10,500.Assume that you could have invested the annual premium in a mutual fund yielding 7 percent annually.What is the net cost of your insurance for the 20-year period? Use a factor of 40.995 for your time value of money calculation.
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