1. Raj (aged 33) and his wife, Anita (aged 30), have just purchased a new condominium in Bandar Sunway for $550,000. They plan to take a 80% mortgage loan of %440,000 for the next 35 years. Raj has the following assets: Nissan Cefiro worth $65,000, stocks on Bursa Malaysia worth $180,000, group insurance by his employers worth $400,000 and personal insurance with a face amount of $250,000. He has a hire purchase loan on the Nissan Cefiro amounting to $40,000. Should he pre-decease Anita, Raj Plans to provide $36,000 per annum for Anita till she reaches age 70. He would also like to create an Emergency Buffer fund of RM50,000 and Final Expenses fund of $35,000. Using the CAPITAL LIQUIDATION method, compute the amount of additional life insurance that Raj needs to purchase. Assume a discount rate of 4% per annum and that income is received at the end of the period.

2. In the example above; as life mortality is uncertain, Raj would like to provide for his wife, Anita, an income of $36,000 for an indefinite time period. Using the CAPITAL PRESERVATION method, compute the amount of additional life insurance that Raj needs to purchase. Assume a discount rate of 4% per annum and that income is received at the end of the period.