Norm and Tanya earn about the same salary and are undertaking a life insurance needs analysis for one of them passing away. If the nominal projected investment return is an average of 8% per annum, inflation is projected at 3% per annum, then find the amount of additional insurance they should purchase, given the following data: Number of years insurance money should last 30 Net Worth $33,257 CPP Survivor Benefit $400 per month Salary $45,000 Lifestyle Expenses (after mortgage) will continue at full amount $5,000 per month Additional funds for emergency, vacation & taxes $35,000 Funeral expenses $20,000 Current group insurance coverage from employer 1 x Salary Enter your answer rounded to 2 decimal places, and do not enter any symbols such as $, % or commas.
Norm and Tanya earn about the same salary and are undertaking a life insurance needs analysis for one of them passing away. If the nominal projected investment return is an average of 8% per annum, inflation is projected at 3% per annum, then find the amount of additional insurance they should purchase, given the following data: Number of years insurance money should last 30 Net Worth $33,257 CPP Survivor Benefit $400 per month Salary $45,000 Lifestyle Expenses (after mortgage) will continue at full amount $5,000 per month Additional funds for emergency, vacation & taxes $35,000 Funeral expenses $20,000 Current group insurance coverage from employer 1 x Salary Enter your answer rounded to 2 decimal places, and do not enter any symbols such as $, % or commas.
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
Related questions
Question
Norm and Tanya earn about the same salary and are undertaking a life insurance needs analysis for one of them passing away. If the nominal projected investment return is an average of 8% per annum, inflation is projected at 3% per annum, then find the amount of additional insurance they should purchase, given the following data:
| Number of years insurance money should last | 30 |
| Net Worth | $33,257 |
| CPP Survivor Benefit | $400 per month |
| Salary | $45,000 |
| Lifestyle Expenses (after mortgage) will continue at full amount |
$5,000 per month |
| Additional funds for emergency, vacation & taxes |
$35,000 |
| Funeral expenses |
$20,000 |
| Current group insurance coverage from employer |
1 x Salary |
Enter your answer rounded to 2 decimal places, and do not enter any symbols such as $, % or commas.
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 3 steps with 2 images
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.Recommended textbooks for you
Essentials Of Investments
Finance
ISBN:
9781260013924
Author:
Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:
Mcgraw-hill Education,
Essentials Of Investments
Finance
ISBN:
9781260013924
Author:
Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:
Mcgraw-hill Education,
Foundations Of Finance
Finance
ISBN:
9780134897264
Author:
KEOWN, Arthur J., Martin, John D., PETTY, J. William
Publisher:
Pearson,
Fundamentals of Financial Management (MindTap Cou…
Finance
ISBN:
9781337395250
Author:
Eugene F. Brigham, Joel F. Houston
Publisher:
Cengage Learning
Corporate Finance (The Mcgraw-hill/Irwin Series i…
Finance
ISBN:
9780077861759
Author:
Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor
Publisher:
McGraw-Hill Education