Business
Business, 19.02.2021 03:40, okitsfrizz2370

Assume that Gary and Cathy, age 25, have one child, just born. For life insurance analysis, assume that they want to cover expenses for the next 18 years if one of them died today. Assume that the aftertax income per year would be $22,000 if Gary died today, for 18 years until the child's Social Security Survivor benefits stopped. Assume that they will ignore the period after 18 years. They would like to have a $96,000 college fund for the child, but have no other 1-time needs. Gary has a life insurance policy for $42,000. Assume that they have no other financial resources that Cathy could use for living expenses. If he died, they would like Cathy to be able to spend $40,000 per year for the next 18 years. Answer the following question using the method specified in the posted packet chapter and lecture, assuming a 0% real interest rate. What is the total value of resources?

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Assume that Gary and Cathy, age 25, have one child, just born. For life insurance analysis, assume t...

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