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1. Determine the present value of the insurance benefits that could provide $40,000 over the next 15 years for the Sampson family. Assume that the
1. Determine the present value of the insurance benefits that could provide $40,000 | ||||||
over the next 15 years for the Sampson family. Assume that the insurance payment | ||||||
could be invested to earn 6 percent interest over time. | ||||||
Annual amount | $40,000 | |||||
Number of years | 15 | |||||
Annual interest rate | 6% | |||||
Present value | $388,489.96 | |||||
2. Considering the insurance benefits needed to provide $40,000 over the next | ||||||
15 years, plus the additional $330,000 of insurance coverage, what amount of | ||||||
insurance coverage is needed? | ||||||
Total Insurace coverage: $388,489 + $330,000 = $718,489.9 | ||||||
3. Given the total amount of insurance coverage needed and Dave's present age | ||||||
(30 years old), estimate the premium that the Sampsons would pay. |
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