Suppose that you earn $50,000 annually. You expect expenses to drop by 22% for your family in the eventof your death. Currently, if you die, you want to provide for your family for at least 15 more years, and theapplicable after-tax and inflation return assumed is 5%. Using the earnings multiple approach provided inyour textbook, what would be the amount of life insurance that you should purchase?
Suppose that you earn $50,000 annually. You expect expenses to drop by 22% for your family in the eventof your death. Currently, if you die, you want to provide for your family for at least 15 more years, and theapplicable after-tax and inflation return assumed is 5%. Using the earnings multiple approach provided inyour textbook, what would be the amount of life insurance that you should purchase?
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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Transcribed Image Text:Suppose that you earn $50,000
annually. You expect expenses to
drop by 22% for your family in
the eventof your death.
Currently, if you die, you want to
provide for your family for at
least 15 more years, and
theapplicable after-tax and
inflation return assumed is 5%.
Using the earnings multiple
approach provided inyour
textbook, what would be the
amount of life insurance that you
should purchase?
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