Suppose that yours is a typical family. Your annual income is $55,000. Using the easy method, what should be your need for life insurance? (Do not round intermediate calculations.) Life insurance need $ 26,950
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![Problem 12-7 Calculating the Amount of Life Insurance Needed Using the Easy Method [LO12-2]
Suppose that yours is a typical family. Your annual income is $55,000. Using the easy method, what should be your need for life
insurance? (Do not round intermediate calculations.)
Life insurance need
$ 26,950](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F40852b75-c577-47e7-9dee-931d83532082%2Fead582d2-5f75-44b7-9c80-2a6bf7f21fd8%2Fc47wyqk_processed.jpeg&w=3840&q=75)
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- Problem 5-10 Calculating Perpetuity Values [LO 1] The Maybe Pay Life Insurance Company is trying to sell you an investment policy that will pay you and your heirs $29,000 per year forever. Assume the required return on this investment is 7.5 percent. How much will you pay for the policy? Note: Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16. Policy value todayD6)  Time remaining: 00:09:33 Finance Andrew and Gina, both aged 56, are well off financially and are in the highest marginal tax bracket. They want to gift money to their two teenage grandchildren to pay for their college education. Andrew and Gina are confused about the different savings options that are available to them and have asked you, their financial planner, for advice in sorting this out. Which statement is not correct? Group of answer choices a.A Section 2503(b) trust is not the best savings option because the trust must distribute all income each year to the trust's income beneficiaries. b.A custodial account can accumulate income that can be used to pay for any educational expenses, but the earnings are not tax‐deferred. c. Distributions taken from Andrew's traditional IRA to pay for qualified education expenses after age 59½ are not taxable to Andrew. d. Appreciating stock gifted to the grandchildren would reduce the value of the couple's gross estate and…MCQ'S: 16) An insurance company offers you an end-of-year annuity of $48,000 per year for the next 20 years. They claim your return on the annuity is 9 percent. What should you be willing to pay today for this annuity? a.$429,600 b.$398,144 c.$438,192 d.$408,672 17) Al Corbin is 25 years old today and wishes to accumulate enough money over the next 35 years to provide for a 20-year retirement annuity of $100,000 at the beginning of each year, starting with his 60th birthday. He can save $2,000 at the end of each of the next 10 years and $3,000 each year for the following 10 years. How much must he save each year at the end of years 21 through 35 to obtain his goal? Assume that the average rate of return over the entire period will be 10%. a.$9,642 b.$24,289 c.$12,321 d.$26,969 18) Firms carry out share repurchase agreements in a number of ways, including all of the…
- CH9HW i Help Save & Exit Submit a. A friend of yours, Grace, wants to purchase a house in five years. To save for the house, Grace decides to deposit $140,000 in a savings account on January 1 of this year. The savings account will earn 8 percent annually. Any interest earned will be added to the fund at year-end (rather than withdrawn). b. At the end of each year, a different friend, Claire, plans to deposit $10,400 in a savings account. The account will earn 11 percent annual interest, which will be added to the fund balance at year-end. Claire will make her first deposit at the end of this year. (FV of $1, PV of $1, FVA ofhw3 12)Alex Karev has taken out a $180,000loan with an annual rate of 9 percent compounded monthly to pay off hospital bills from his wife Izzy's illness. If the most Alex can afford to pay is $3,500 per month, how long will it take to pay off the loan? How long will it take for him to pay off the loan if he can pay $4,000 per month? Use five decimal places for the monthly percentage rate in your calculations. Question content area bottom Part 1 a. If Alex can payn $3,500 per month, the number of years it takes for him to pay off the loan is enter your response here yearsMCQ'S: 21) If a 16-year-old high school student put $2,000 at the end of each year for 4 years into an IRA that earned a rate of 9%, how much would she have accumulated by age 65? Assume funds are left to accumulate for 45 years (age 20-65) at 9%. a.$386,616 b.$9,146 c.$1,767,995 d.$442,014 . 22) Clinch River Power is considering refunding a $150 million 12% coupon bond with a 10% coupon bond, 20-year bond. The current bond also matures in 20 years and is now callable at 110% of par. The unamortized flotation cost on the old issue is $540,000, and the flotation cost of the new issue is 0.925%. Clinch River estimates that there would be a 4-week period where both bonds would be outstanding. The company has a weighted cost of capital of 11% and a 40% marginal tax rate. Clinch River has decided to sell the refunding issue. What is their reasoning? a.NPV is approximately $10.808 million b.NPV is…
- Chapter 8Financial Planning Exercise 6Life insurance premiums and comparison of types EXHIBIT 8.2 Representative Annual Renewable Term Life Insurance Premiums: $100,000 Policy, Preferred Nonsmoker Rates When you buy term life insurance, you're buying a product that provides life insurance coverage and nothing more. This table shows representative rates for several age categories and selected policy years; actual premiums increase every year. As you can see, females pay less than males for coverage, and premiums increase sharply with age. AGE 25 AGE 40 Policy Year Male Female Male Female 1 $164 $143 $188 $178 5 $167 $150 $228 $225 10 $174 $163 $297 $264 15 $186 $176 $388 $330 20 $228 $225 $550 $443 EXHIBIT 8.3 Representative Level Premium Term Life Rates: $100,000 Preferred Nonsmoker Policy This table shows representative annual premiums for $100,000 of level premium term life…12–21. You choose to invest your $2,985 income tax refund check (rather than spend it!) in an account earning 5% compounded annually. How much will the account be worth in 30 years? PROVIDE THE FOLLOWING FOR EACH PROBLEM N= I= PV= PMT= FV= C/Y= P/Y =Not use excel Q)A man may take $50000 cash or 10 equal monthly payments on a life insurance policy, where the first payment is to be made immediately. What is the monthly payment if money is worth 3% compounded monthly?
- Problem 7-22 Adoption Expenses (LO 77) Carl and Jenny adopt a Korean orphan. The adoption takes 2 years and two trips to Korea and is finalized in 2021. They pay $7,000 in 2020 and $7,500 in 2021 for qualified adoption expenses. In 2021, Carl and Jenny have AGI of $150,000. If required, carry any division out to four decimal places and round final answers to the nearest dollar. Question Content Area a. What is the adoption credit Carl and Jenny can claim in 2021? b. How much credit could they claim if their AGI was $221,660?PA3. LO 11.3Use the tables in Appendix B to answer the following questions. If you would like to accumulate $2,500 over the next 4 years when the interest rate is 15%, how much do you need to deposit in the account? If you place $6,200 in a savings account, how much will you have at the end of 7 years with a 12% interest rate? You invest $8,000 per year for 10 years at 12% interest, how much will you have at the end of 10 years? You win the lottery and can either receive $750,000 as a lump sum or $50,000 per year for 20 years. Assuming you can earn 8% interest, which do you recommend and why?Kk.121. You just turned 22 years old and want to retire when you turn 65. You plan to put $4,000 every year into a ROTH IRA, a retirement account from which you can withdraw money after retirement without having to pay any taxes. You expect to earn a return of 4% on your investments every year. How much money can you expect to have at age 65 if you make your first annual deposit now and your last one on the day you turn 64?
