Answered step by step
Verified Expert Solution
Question
1 Approved Answer
3. Deshawna is 65 years old. She paid $240,000 for an immediate annuity of $2,000 a month for her lifetime. The contract does not provide
3. Deshawna is 65 years old. She paid $240,000 for an immediate annuity of $2,000 a month for her lifetime. The contract does not provide for any refunds. According to the Internal Revenue Service regulations, her life expectancy is 85 (20 years of the annuity). She receives 12 monthly payments in the first year of her contract. How much of her income from the annuity is taxable for that year?
4. Hassan is 45 years old. You are a life insurance producer, and Hassan has indicated that if he dies prematurely he wants coverage that will replace the portion of his income needed to support his family until he would have retired (at age 65). He expects his average annual earnings will be $64,000, of which he expects half will be needed to support of his family. He agrees that an annual discount rate of 5% is appropriate. How much insurance does this suggest for Hassan?
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started