Purchasing Additional Insurance. Nancy is a widow with two teenage children. Nancy's gross income is $2,300 per month and taxes take about 23% of her income. Using the income method, Nancy calculates she will need to purchase about eight times her disposable income in life insurance to meet her needs. Therefore, she will need to purchase life insurance in the amount of $170,016. Now assume that Nancy's employer provides her with two times her annual gross salary in life insurance. How much additional insurance should Nancy purchase? The amount of additional insurance Nancy should purchase is $. (Round to the nearest dollar.)

Purchasing Additional Insurance. Nancy is a widow with two teenage children. Nancy's gross income is $2,300 per month and taxes take about 23% of her income. Using the income method, Nancy calculates she will need to purchase about eight times her disposable income in life insurance to meet her needs. Therefore, she will need to purchase life insurance in the amount of $170,016. Now assume that Nancy's employer provides her with two times her annual gross salary in life insurance. How much additional insurance should Nancy purchase? The amount of additional insurance Nancy should purchase is $. (Round to the nearest dollar.)

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

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Lori earns $3,898 per month. She has a monthly rent payment of $980 along with average credit card payments of $325 and student loan payments of $250. She wants to finance a car but needs to determine her maximum car payment to keep her back end DTI at 39%. What would this payment be?
Mary would like to save $10,000 at the end of 5 years for a future down payment on a car. a. How much should she deposit at the end of each month in a savings account that pays 1.2%/a, compounded monthly, to meet her goal? b. If you currently have a part-time job, consider your hourly wage. If you do not have a job, use the minimum hourly wage in your jurisdiction. How many hours each month would you have to work, just to make those payments? Write a brief reflection on the advantages and disadvantages to long-term saving for a purchase, compared to borrowing a large sum of money and paying it off over time. Note that interest rates for savings accounts are always lower than interest rates for borrowing.
Taibi Hafid is considering the purchase of a used car. The price, including the title and taxes, is $10,500. Taibi is able to make a $2,500 down payment. The balance, $8,000, will be borrowed from his credit union at an interest rate of 10% compounded daily. The loan should be paid in 48 equal monthly payments. Compute the monthly payment. What is the total amount of interest Taibi has to pay over the life of the loan?
You and your spouse are in good health and have reasonably secure careers. Each of you makes about $40,000 annually. You own a home with an $80,000 mortgage, and you owe $15,000 on car loans, $5,000 on personal debts, and $4,000 on credit card loans. You have no other debt. You have no plans to increase the size of your family in the near future. Estimate your insurance needs using the DINK method. Show work!
A couple wants to purchase a $170,000 house, and they have enough saved for a 5% down payment and money for other closing costs. The bank is offering a 30-year mortgage at 5.35% interest, compounded monthly. The couple has an annual after-tax income of $85,000 and other debts totaling $850 per month. Because their down payment is less than 20%, they are required to pay for private mortgage insurance, which costs 1% of the loan amount each year.(a) If the maximum debt-to-income ratio (total monthly debt divided by after-tax monthly income) is 43%, can the couple afford to purchase the home? (b) If the couple lives in the house for 30 years, what is the total amount paid for the house, including down payment, principal, interest, and private mortgage insurance?
Jeni has decided that she needs to start saving for her retirement. She can afford $100 a month deducted automatically from her paycheck. She deposits it into an account that earns 4.5% interest compounded monthly. How much will she have in her account when she retires 42 years later? A. $ 14,922.70 B.$ 50,400.00 C. $132,213.00 D. $149,226.96
Jenelle bought a home for $370,000, paying 18% as a down payment, and financing the rest at 4.6% interest for 30 years. Round your answers to the nearest cent. How much money did Jenelle pay as a down payment? $ What was the original amount financed? $ What is her monthly payment? $ If Jenelle makes these payments every month for thirty years, determine the total amount of money she will spend on this home. Include the down payment in your answer. $
Hailey starts an IRA (Individual Retirement Account) at the age of 22 to save for retirement. Shedeposits $450 each month. The IRA has an average annual interest rate of 8% compounded monthly.How much money will she have saved when she retires at the age of 65? Round your answer to thenearest cent, if necessary.
Please help on this question. Please show all steps.
Lynne needs to borrow $10000 for cosmetic surgery. She obtains a loan from her grandmother for 24 months at a simple interest rate of 6.9%. What is the loans future value?
Larry purchased an annuity from an insurance company that promises to pay him $9,000 per month for the rest of his life. Larry paid $946,080 for the annuity. Larry is in good health, and he is 72 years old. Larry received the first annuity payment of $9,000 this month. Use the expected number of payments in Exhibit 5-1 for this problem. a. How much of the first payment should Larry include in gross income? b. If Larry lives more than 15 years after purchasing the annuity, how much of each additional payment should he include in gross income? c. What are the tax consequences if Larry dies just after he receives the 100th payment?
Andrea, a self-employed individual, wishes to accumulate a retirement fund of $400,000. How much should she deposit each month into her retirement account, which pays interest at a rate of 5.5%/year compounded monthly, to reach her goal upon retirement 35 yr from now? (Round your answer to the nearest cent.)

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