5. Lauren works for a life insurance company, and one of her clients has a life insurance policy that
will pay his family $58,000 per year if he dies. Lauren has to figure out how much the insurance
company will have to put into a bank account when it has to pay. She expects interest rates to be at
2.8% when the insurance company has to pay, but she wants to examine the effect that some other
interest rates would have on the amount. Help her with her calculations by answering the following
questions. Round all your answers to the nearest cent. (5 points: Part 1 - 1 point; Part II - 1 point; Part
III-1 point; Part IV-1 point; Part V- 1 point)
Part I: If interest rates are at 2.8% when the insurance company has to pay, how much will the
insurance company have to put into a bank account?