Calculate the amount of life insurance linda

Assignment Help Finance Basics
Reference no: EM131772627

Linda and Jeff Carland are preparing to recieve their first child. With her anticipated complications of the delievery, Linda is getting very serious on buying a life insurance that would compensate the financial loss for her family for the next 25 years, if she were to die. In her desirable life insurance, she wants to factor in $50,000 educational fund for her newborn baby. She also wants to pay off the remaining $70,000 of their home mortgage, and gives Jeff a six-month leave from work so he can better adjust to life after her death. Linda also figures out that a minimum of $6,000 would be needed for her burial. Given that her annual disposable income is $25,000, Jeff's annual income is $27,000, her social security check would be $802.00 a month for 15 years, and her current universal life insurance would cover $75,000.

Based on the total loss estimation by the "Needs Approach" calculate the amount of life insurance Linda needs to buy, given that the interest rate is 9.5%

Reference no: EM131772627

Questions Cloud

Sample means for random samples of adults : Assume that the population average for adults is 6 hours and 57 minutes, or 6.95 hours of sleep per night, with a standard deviation of 2 hours.
Compute the cost of a single unit of product : Compute cost of a single unit of product under both the absorption costing and variable costing approaches. The Dean Company produces and sells a single product
How much would her balance be : She obtained this mortgage at annual interest of 4.5% for 30 years. How much would her balance be?
What is the total of these last five payments : She paid all the monthly payments except the last five payments, which she wants to pay all at once.
Calculate the amount of life insurance linda : Based on the total loss estimation by the "Needs Approach" calculate the amount of life insurance Linda needs to buy, given that the interest rate is 9.5%
Compute the machines internal rate of return : Compute the machine's internal rate of return. Would you recommend purchase of the machine
What proportion of days in typical years have rain : You are interested in knowing what proportion of days in typical years have rain or snow in the area where you live. For the months of January and February.
Value of your retirement plan after : Given a 6 percent interest rate, what is the value of your retirement plan after the 40 years?
Specify the population and the measurement of interest : Explain whether you think the Rule for Sample Means applies to each of the following situations. If it does apply, specify the population of interest.

Reviews

Write a Review

Finance Basics Questions & Answers

  Demand for business goods and services

What effect does an increase in demand for business goods and services have on the real interest rate? What other factors can affect the real interest rate?

  Romano inc has the following data what is the firms cash

romano inc. has the following data. what is the firms cash conversion cycle?inventory conversion period 38 daysaverage

  Which security do mmfs invest in most often

How do money market funds differ from other types of mutual funds in terms of how they use the money invested by shareholders?

  How does the 10 k differ from the 10 q

Describe how some of the primary groups of users use financial statements.- What is a 10-K?- How does the 10-K differ from the 10-Q?

  What if your portfolionbsp of 30-day treasury bills every

suppose you owned a portfolionbsp of u.s. government bonds with a maturity date of 30 years. would your portfolio be

  Possible capital project using the npv method

The finance department of a large corporation has evaluated a possible capital project using the NPV method, the Payback Method, and the IRR method.

  Value of perpetual payments

Hello, so I calculated that the present value of a perpetuity was 922.96 which would be less than the $1000 I was offered to pay for the perpetuity (I would only start receiving payments from the perpetuity in the 25th year. Can someone explain to..

  Developing nations for manufactured goods

The greater part of international trade consists of an exchange of raw materials from developing nations for manufactured goods from developed nations."

  What is the total amount of interest that was paid

Assume that your aunt sold her house on December 31 and that she took a mortgage in the amount of $10,000 as part of the payment. The mortgage has a quoted (or nominal) interest rate of 10 percent, but it calls for payments every 6 months, beginning ..

  Bmc cash conversion cycle and payables deferral period

Its annual sales are $12000000 and its cost of good sold represents 80 percent of annual sales. Assume there are 365 days in a year. What is bmc's cash conversion cycle and payables deferral period?

  Dtermine the relevant cash flows

Dtermine the relevant cash flows, and depict the cash flows on a time line. A project that requires an initial investment of $120,000 and will generate annual operating cash inflows of $25,000 for the next 18 years. In each of the 18 years, maintenan..

  What is the npv of both projects

What is the NPV of both projects? Using Microsoft Excel (or similar spreadsheet software), create a model for the Net Present Value of all cash flows.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd