Jerry, who is age y, buys a home and takes out a 30-year, $250,000 mortgage at anannual effective interest rate of 6%.

Jerry, who is age y, buys a home and takes out a 30-year, $250,000 mortgage at anannual effective interest rate of 6%. He will repay this mortgage with level annualpayments at the beginning of each year, starting a time 1. The first mortgage paymentis at time 1 and the final mortgage payment is at time 30.He wants to purchase a 30-year level premium, fully discrete term insurance to pay offthe mortgage in the event that he dies. That is, the policy will pay the outstandingmortgage balance at the end of the year of death; the policy starts at time 0 and endsat time 30. (Hint: The death benefit for the first year is the outstanding balance atthe end of the first year, which is $265,000.)

Suppose that at time 10, Jerry no longer wishes to pay premiums for this policy. The insurer offers Jerry an automatic premium loan option under which his net policy value at time 10 is used as collateral for a loan to pay his annual premiums.The loan will accumulate at 8% annual effective interest. At the first premium payment date that the accumulated amount of the loan exceeds the net policy value, the policy will expire. At what time does Jerry’s policy expire?