Calli feels that the best way to determine how much life insurance she needs is to use the capital drawdown method. If inflation is 2.1% and she wants to have enough life insurance to provide her family with $54,000 for 32 years, how much life insurance does she need? Use the capital drawdown method to calculate the life insurance she needs and input your answer to the nearest dollar.

Calli feels that the best way to determine how much life insurance she needs is to use the capital drawdown method. If inflation is 2.1% and she wants to have enough life insurance to provide her family with $54,000 for 32 years, how much life insurance does she need? Use the capital drawdown method to calculate the life insurance she needs and input your answer to the nearest dollar.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Ivanna wants to save money to buy a motorcycle. She invests in an ordinary annuity that earns 5.4% interest, compounded annually. Payments will be made at the end of each year. 2 How much money will she need to pay into the annuity each year for the annuity to have a total value of $6000 after 5 years? D Do not round intermediate computations, and round your final answer to the nearest cent. If necessary, refer to the list of financial formulas. Aa ?
The Jacksons are considering selling their current residence, buying a small home near Avery’s parents for $220,000 with a $100,000 30-year mortgage at 3.5%, and investing the net proceeds in their retirement accounts and education accounts. They assume they will incur 2% in transaction costs for the purchase and 6% for the sale. They have asked you the following: What will be their payment (principal and interest only) on their new home? How much will they be able to invest in their retirement accounts and education accounts after selling the old house and buying the new house? If the Jacksons purchase the new house one year from today, what will be the balance on their mortgage when they retire? What is the income tax consequence of their sale and purchase strategy?
Suppose Gretchen's health insurance has a $500 annual deductible. Gretchen is responsible for 20 percent co-pay when she meets her deductible. If Gretchen has $800 in medical expenses this year, how much must she pay?
Maria and Roberto Cruz's financial adviser told them they will need 80 percent of their preretirement income to live comfortably. Their annual preretirement income is $75,000. What will their annual retirement income need to be?
Sara met with a financial planner and has determined that she will need $1,250,000 when she retires in 30 years. She has found an annuity that pays 5.65%, compounded monthly. What will she need to save each month, if a) Sara begins saving nowz?
Munira Al Falasi is 40 years old. She wants to begin saving for retirement with the first payment to come 1 year from now. She can save $5,000 per year with 9% rate of return. How much money will Munira have at the age of 65? How much money will Munira have at the age of 70? Munira expects to live for 20 years, if she retires at 65; and for 15 years, if she retires at 70. If her investments continue to earn the same rate of return, how much will Munira be able to withdraw at the end of each year after her retirement at each retirement age? Munira expects to live for 20 years, if she retires at 65: Munira expects to live for 15 years, if she retires at 70:
Use Worksheet 5.3. Rachel and Alexander Harrison need to calculate the amount they can afford to spend on their first home. They have a comt annual income of $67,500 and have $37,000 available for a down payment and closing costs. The Harrisons estimate that homeowner's insurance property taxes will be $250 per month. They expect the mortgage lender to use a 30 percent (of monthly gross income) mortgage payment afford ratio, to lend at an interest rate of 6 percent on a 30-year mortgage, and to require a 10 percent down payment. Based on this information, use th home affordability analysis form in Worksheet 5.3 to determine the highest-priced home the Harrisons can afford. Assume that closing costs are o of the down payment. Round the answer to the nearest dollar.
Dan is planning to buy a new home that costs $130000 Find the following if Dan make a 5% downpayment. How much will Dan's down payment be? (Round to the nearest cent) How much will Dan owe after he makes the down payment? (Round to the nearest cent)
Gabe and Sarah would like to begin saving for their children's college education. They would like to know the amount of college funds that would be necessary on day one of college to pay for all tuition costs for each child. The current tuition at the university is $25,000. The couple is comfortable assuming an annual rate of return of 6% on their college investment savings program. They anticipate that each child will begin college at age 18 and attend for four years. The Consumer Price Index (CPI) is expected to be 3% and the expected college inflation rate is 5% per year.
Nikul
On the basis of how long she has until retirement and her comfort with investment risk, Chelsea has decided that she wants to allocate the money in her retirement account as follows: 75% to equities, 20% to fixed income, and 5% to cash. If Chelsea assumes that each asset class earns the low end of the historical average rates of return provided below, what overall rate of return would she expect to earn over the long term? Equities: 8%-12% Fixed Income: 4% - 7% . Cash: 2% - 5% . O 6.90% O 5.60% O 10.65% O 7.75% 4.67%
Laura and Tommy want to make sure their newborn can attend college. They have seen estimates that the four-year cost of in-state colleges will be $160,000 in 18 years. They ask their financial advisor (they obviously didn't take this course) how much they need to save in an annuity each year over that time if they invest at a fairly low-risk rate of six percent. What was the advisor's answer (rounded to the nearest dollar)? Hint: remember that discounting is the inverse of compounding. [submit your answer with a numerical value with a comma and no dollar signs]