Sylvia is married and has four teenage children. She has a detailed retirement plan in place. She is 43 years old and she hopes to retire in 17 years from now when she is 60 by which time her superannuation should be sufficient to afford a comfortable life in retirement for herself and her partner. Sylvia is however concerned that she has insufficient life insurance and she would like to ensure that she has sufficient to cover any loss of earnings caused by her death during that 17 year period. She currently earns $150,000 per annum. 

(a) Using a simple multiple approach how much life insurance coverage will Sylvia need to cover her loss of earnings for the 17 year period? 

(b) If Sylvia were to pass away in the first year and the amount calculated in (a) above was invested at 2% for 17 years, what would be the present value of this insurance payout? 

(c) If Sylvia were to pass away in the first year and the amount calculated in (a) above was invested at 2% and the inflation rate was 3% what would be the present value of this insurance payout