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Mary, who is married and the mother of three, is 35 years and expects to work until 75. She earns $55,000 per year. Mary expects
- Mary, who is married and the mother of three, is 35 years and expects to work until 75. She earns $55,000 per year. Mary expects inflation to be 3% over her working life, and the appropriate risk-free discount rate is 5%. Her personal consumption is equal to 27% of her after-tax earnings, and her combined federal and state marginal tax bracket is 15%. What is the amount of life insurance necessary for Mary using the Human Life Value method?
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- What if Mary works until 70? What would be the amount of life insurance necessary for her?
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- What is the amount of life insurance necessary for Mary using the Capitalization of Earnings method if she works until 75?
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- What is the amount of life insurance necessary for Mary using the Capitalization of Earnings method if she works until 70?
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