1. Joetta Hernandez is a single parent with two children and earns $54,100 a year. Her employer's group life insurance policy would pay 2.5 times her salary. She also has $72,133 saved in a 401(k) plan, $6,011 in mutual funds, and a $3,607 certificate of deposit. She wants to purchase term life insurance for 15 years, until her youngest child is self-supporting. She is not concerned about her outstanding mortgage, as the children would live with her sister in the event of Joetta's death. Assuming she can receive a 4 percent after-tax, after-inflation return on insurance proceeds, use the earnings multiple method to calculate her insurance need. How much more insurance does Joetta need to buy? What other information would you need to know to use the needs approach to calculate Joetta's insurance coverage? Click on the table icon to view the PVIFA table 1. Assuming she can receive a 4 percent after-tax, after-inflation return on insurance proceeds and using the earnings multiple method, Joetta's insurance need is $ (Round to the nearest dollar.) How much more insurance does Joetta need to buy? What other information would you need to know to use the needs approach to calculate Joetta's insurance coverage? (Select the best choice below.) O A. Joetta needs to buy $309,864 of insurance. Since Joetta is a single parent, some needs included in the needs approach method are not relevant. To use this method, Joetta would need specific information on projected amounts for cleanup funds, debt elimination funds excluding the mortgage, educational expenses for the children, and the availability of Social Security to assist with dependency expenses. Joetta can also consider the effect of existing assets to reduce the amount of insurance needed. B. Joetta needs to buy $580,364 of insurance. Since Joetta is a single parent, some needs included in the needs approach method are not relevant. To use this method, Joetta would need specific information on projected amounts for cleanup funds, debt elimination funds excluding the mortgage, educational expenses for the children, and the availability of Social Security to assist with dependency expenses. Joetta can also consider the effect of existing assets to reduce the amount of insurance needed. 1: Data Table 1% 2% 3% 4% 7% 8% 9% 10% n 1 0.909 0.980 1.942 2 0.935 1.808 2.624 1.736 3 2.487 3.170 4 0.917 1.759 2.531 3.240 3.890 4.486 5.033 5 0.971 1.913 2.829 3.717 wan" 4.580 Twey 5.417 w 6.230 7.020 7.786 8.530 2.884 want 3.808 4.713 5.601 6.472 7.325 8.162 waren 8.983 9.787 6 3.791 4.355 Tower 4.868 5.535 7 - 8 . 9 10 5.335 5.995 6.418 6.805 11 9.253 9.954 12 10.575 13 11.348 0.990 1.970 2.941 3.902 4.853 5.795 6.728 7.652 8.566 9.471 10.368 11.255 12.134 13.004 13.865 . 14.718 15.562 16.398 17.226 18.046 18.857 19.860 20 EC 20.456 21 22 22.023 25.808 32.835 39.196 Present Value of an Annuity of $1 (PVIFA) 5% 6% 0.962 0.952 0.943 1.886 1.859 1.833 2.775 2.723 2.673 un 3.630 3.546 3.465 wiece 4.452 4.329 4.212 were 5.242 5,076 W.27 4.917 6.002 5.786 5.582 w 6.733 6.463 6.210 7.435 7.108 6.802 - 8.111 7.722 7.360 8.760 8.306 7.887 non 9.385 8.863 8.384 9.986 9.394 8.853 10.563 9.899 9.295 11.118 10.380 9.712 11.652 10.838 10.106 12.166 11.274 10.477 - 12.659 11.690 10.828 13.134 12.085 11.158 13.590 12.462 11.470 14.029 12.821 11.764 14.451 13.163 12.042 44 49.90 492 14.857 13.489 12.303 49700 15.247 13.799 12.550 15.622 14. 49 200 12.783 17.292 15.372 13.765 19.793 17.159 15.046 21.482 18.256 15.762 14 15 12.106 12.849 5.759 6.145 6.495 cm 6.814 7.103 ** 7.367 7.606 7.824 8.022 8.201 0.926 1.783 2.577 3.312 3.993 we 4.623 5.206 5.747 6.247 6.710 ". 7.139 7.536 7.904 8.244 8.559 8.851 9.122 9.372 9.604 9.818 10.017 10.201 400 10.371 10.529 10.675 11.258 11.925 12.233 7.161 7.487 7.786 are 8.061 8.313 3.387 4.100 Theo 4.767 5.389 5.971 6.515 7.024 7.499 7.943 8.35B wewe 8.745 9.108 nu 9.447 9.763 - 10.059 10.336 mm 10.594 10.836 mon 11.081 442 11.272 1980 11.469 44 11.654 12.409 13.332 13.801 16 17 8.544 18 10.835 acco 11.296 11.938 . 12.561 13.166 13.754 14.324 14.877 15.415 15.937 qe 16.444 46.00 16.936 17.413 19.600 8.365 13.578 14.292 14.992 15.678 16.351 17.011 17.658 40 20 18.292 400 18.914 19 - 20 21 22 23 24 20 25 25 30 30 40 50 8.756 8.950 9.129 9.292 9.442 9.580 EON 0707 9.823 8.514 8.849 8.772 con 8.883 8.985 8995 9.077 19.523 9.427 23.115 27.355 31.424 10.274 10.757 10.962 9.779 9.915 25.730 1. Joetta Hernandez is a single parent with two children and earns $54,100 a year. Her employer's group life insurance policy would pay 2.5 times her salary. She also has $72,133 saved in a 401(k) plan, $6,011 in mutual funds, and a $3,607 certificate of deposit. She wants to purchase term life insurance for 15 years, until her youngest child is self-supporting. She is not concerned about her outstanding mortgage, as the children would live with her sister in the event of Joetta's death. Assuming she can receive a 4 percent after-tax, after-inflation return on insurance proceeds, use the earnings multiple method to calculate her insurance need. How much more insurance does Joetta need to buy? What other information would you need to know to use the needs approach to calculate Joetta's insurance coverage? Click on the table icon to view the PVIFA table 1. Assuming she can receive a 4 percent after-tax, after-inflation return on insurance proceeds and using the earnings multiple method, Joetta's insurance need is $ (Round to the nearest dollar.) How much more insurance does Joetta need to buy? What other information would you need to know to use the needs approach to calculate Joetta's insurance coverage? (Select the best choice below.) O A. Joetta needs to buy $309,864 of insurance. Since Joetta is a single parent, some needs included in the needs approach method are not relevant. To use this method, Joetta would need specific information on projected amounts for cleanup funds, debt elimination funds excluding the mortgage, educational expenses for the children, and the availability of Social Security to assist with dependency expenses. Joetta can also consider the effect of existing assets to reduce the amount of insurance needed. B. Joetta needs to buy $580,364 of insurance. Since Joetta is a single parent, some needs included in the needs approach method are not relevant. To use this method, Joetta would need specific information on projected amounts for cleanup funds, debt elimination funds excluding the mortgage, educational expenses for the children, and the availability of Social Security to assist with dependency expenses. Joetta can also consider the effect of existing assets to reduce the amount of insurance needed. 1: Data Table 1% 2% 3% 4% 7% 8% 9% 10% n 1 0.909 0.980 1.942 2 0.935 1.808 2.624 1.736 3 2.487 3.170 4 0.917 1.759 2.531 3.240 3.890 4.486 5.033 5 0.971 1.913 2.829 3.717 wan" 4.580 Twey 5.417 w 6.230 7.020 7.786 8.530 2.884 want 3.808 4.713 5.601 6.472 7.325 8.162 waren 8.983 9.787 6 3.791 4.355 Tower 4.868 5.535 7 - 8 . 9 10 5.335 5.995 6.418 6.805 11 9.253 9.954 12 10.575 13 11.348 0.990 1.970 2.941 3.902 4.853 5.795 6.728 7.652 8.566 9.471 10.368 11.255 12.134 13.004 13.865 . 14.718 15.562 16.398 17.226 18.046 18.857 19.860 20 EC 20.456 21 22 22.023 25.808 32.835 39.196 Present Value of an Annuity of $1 (PVIFA) 5% 6% 0.962 0.952 0.943 1.886 1.859 1.833 2.775 2.723 2.673 un 3.630 3.546 3.465 wiece 4.452 4.329 4.212 were 5.242 5,076 W.27 4.917 6.002 5.786 5.582 w 6.733 6.463 6.210 7.435 7.108 6.802 - 8.111 7.722 7.360 8.760 8.306 7.887 non 9.385 8.863 8.384 9.986 9.394 8.853 10.563 9.899 9.295 11.118 10.380 9.712 11.652 10.838 10.106 12.166 11.274 10.477 - 12.659 11.690 10.828 13.134 12.085 11.158 13.590 12.462 11.470 14.029 12.821 11.764 14.451 13.163 12.042 44 49.90 492 14.857 13.489 12.303 49700 15.247 13.799 12.550 15.622 14. 49 200 12.783 17.292 15.372 13.765 19.793 17.159 15.046 21.482 18.256 15.762 14 15 12.106 12.849 5.759 6.145 6.495 cm 6.814 7.103 ** 7.367 7.606 7.824 8.022 8.201 0.926 1.783 2.577 3.312 3.993 we 4.623 5.206 5.747 6.247 6.710 ". 7.139 7.536 7.904 8.244 8.559 8.851 9.122 9.372 9.604 9.818 10.017 10.201 400 10.371 10.529 10.675 11.258 11.925 12.233 7.161 7.487 7.786 are 8.061 8.313 3.387 4.100 Theo 4.767 5.389 5.971 6.515 7.024 7.499 7.943 8.35B wewe 8.745 9.108 nu 9.447 9.763 - 10.059 10.336 mm 10.594 10.836 mon 11.081 442 11.272 1980 11.469 44 11.654 12.409 13.332 13.801 16 17 8.544 18 10.835 acco 11.296 11.938 . 12.561 13.166 13.754 14.324 14.877 15.415 15.937 qe 16.444 46.00 16.936 17.413 19.600 8.365 13.578 14.292 14.992 15.678 16.351 17.011 17.658 40 20 18.292 400 18.914 19 - 20 21 22 23 24 20 25 25 30 30 40 50 8.756 8.950 9.129 9.292 9.442 9.580 EON 0707 9.823 8.514 8.849 8.772 con 8.883 8.985 8995 9.077 19.523 9.427 23.115 27.355 31.424 10.274 10.757 10.962 9.779 9.915 25.730