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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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International financial management
Authors: Jeff Madura
9th Edition
978-0324593495, 324568207, 324568193, 032459349X, 9780324568202, 9780324568196, 978-0324593471
