Question 2 (20 marks)You have just purchased a life insurance policy that requires you to make 40semiannual payments of $350 each, where the first payment is due in 6 months.The insurance company has guaranteed that these payments will be invested toearn you an effective annual rate of 8.16 percent, although interest is to becompounded semiannually. At the end of 20 years (40 payments), the policy willmature. The insurance company will pay out the proceeds of this policy to you in10 equal payments, where the first payment to be made one year after the policymatures. If the effective interest rate remains at 8.16 percent, how much will youreceive during each of the 10 years?
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