Adjusted for inflation

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When Renee was living, she and Luke each bought a life insurance policy at the birth of their first child. They used the multiple-of-earnings approach to determine how much life insurance to purchase. Renee used the following information to determine the size of the policy in the event of her premature death: Renee's earnings--$50,000 assumed rate of inflation -- 4% number of years -- 25 Using appendix A4, what would the present value of Renee's life insurance policy need to be to provide a stream of payments equivalent to $50,000 (adjusted for inflation) per year for 25 years?

Reference no: EM131064587

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