After-inflation return on insurance proceeds

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Joetta Hernandez is a single parent with two children and earns ?$58,300 a year. Her? employer's group life insurance policy would pay 2.5 times her salary. She also has ?$77,733 saved in a? 401(k) plan, ?$6,478 in mutual? funds, and a ?$3,887 certificate of deposit. She wants to purchase term life insurance for 15? years, until her youngest child is? self-supporting. She is not concerned about her outstanding? mortgage, as the children would live with her sister in the event of? Joetta's death.

Assuming she can receive a 4 percent? after-tax, after-inflation return on insurance proceeds and using the earnings multiple? method, what is Joetta's insurance need?

Reference no: EM133031679

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