Calculate the amount of insurance peter needs to purchase

Assignment Help Financial Management
Reference no: EM131301682

Amount of Insurance Needed. Peter is married and has two children. He wants to be sure that he has sufficient life insurance to take care of his family if he dies. Peter's wife is a homemaker but attends college part-time pursuing a law degree. It will cost approximately $40,000 for her to finish her education. Since the children are teenagers, Peter feels he will only need to provide the family with income for the next 10 years. He further calculates that the household expenses run approximately $35,000 per year.

The balance on the home mortgage is $30,000. Peter set up a college fund for his children when they were babies, and it currently contains sufficient funds for them to attend college. Assuming that Peter's wife can invest the insurance proceeds at 8%, calculate the amount of insurance Peter needs to purchase.

Reference no: EM131301682

Questions Cloud

What is the function of lan repeaters : Discuss routers in light of bridges ? What is the function of a hub? An "intelligent" hub? A switching hub? Differentiate "store-and-forward" from "cut-through" switches.
How much insurance should nancy purchase : Using the income method, Nancy calculates she will need to purchase about eight times her disposable income in life insurance to meet her needs. How much insurance should Nancy purchase?
Differentiate lan routers with lan switches : Why might an oversized buffer be recommended in a LAN switch? Differentiate LAN routers with LAN switches ? Give one specific environment where WLANs are attractive.
Preventive version of round robin scheduling : What is the essentially preventive version of round robin scheduling?
Calculate the amount of insurance peter needs to purchase : Assuming that Peter's wife can invest the insurance proceeds at 8%, calculate the amount of insurance Peter needs to purchase.
Discuss the importance of quality in a firm : Discuss the importance of quality in a firm's financial statements and how you would go about evaluating the quality of a firm's financial statement
What resources would you need to recommend : What plan of actions would you carry out or implement as Walter's case manager? What steps? What resources would you need to recommend? What type of networking would you do on Walter and Big Mama's behalf ? What case management roles would you..
How much life insurance should they purchase for marty : If Marty were to die, Mary would go back to school part-time to upgrade her training as a nurse. This would cost $20,000. They have a mortgage on their home with a balance of $55,000. How much life insurance should they purchase for Marty?
How many dollars will the cash management system free up : If the company has $5 million per day in collections and $3 million per day in disbursements, how many dollars will the cash management system free up?  Justify your answers

Reviews

Write a Review

Financial Management Questions & Answers

  Describe and analyze the wartime experiences

Describe and analyze the wartime experiences of the Revolution and the effects on women, slaves an natives.

  Create the strategic plan that contains executive summary

Using the Team Target Enterprise is Delta Airline, Create the Final Strategic Plan. The Final Strategic Plan contains: Table of Contents and Executive Summary (350 to 700 words).

  What do you think would about the futures price

What do you think would the futures price of 100 shares of your reference company to be delivered to you in one year be right now

  A company issues zero coupon bonds which mature

A company issues zero coupon bonds which mature in 30 years. These bonds can be bought for $99.38 and then pay no annual interest payments, only $1000 at maturity. What is the annual percentage cost of these bonds to the issuing company?

  Long-term debt outstanding and corporate tax rate

Here is some information about Stokenchurch Inc.: Beta of common stock = 1.2 Treasury bill rate = 4% Market risk premium = 7.5% Yield to maturity on long-term debt = 6% Book value of equity = $440 million Market value of equity = $880 million Long-te..

  What is the future value at discount rate of percent

Paradise, Inc., has identified an investment project with the following cash flows. Year Cash Flow 1 $940 2 1,090 3 1,340 4 1,405 Required: (a) If the discount rate is 8 percent, what is the future value of these cash flows in year 4? (b) What is the..

  What is the present value of the stock

A share of Ryan & Co. common stock is expected to pay a dividend of $2.40 ( D 1 ) at the end of the coming year. If the expected long-run growth rate for this stock is 6%, and if investors require a 18% rate of return, what is the present value of th..

  What is amount of sales tax and selling price before tax

Don Chather bought a new Dell computer for $1,650. This included a 5% sales tax. What is the amount of sales tax and the selling price before the tax?

  Differences between mergers-leveraged-management buyouts

Describe the basic differences between mergers, leveraged buyouts, management buyouts, divestitures, and spin-offs.

  What is the amount of the next dividend

Crazee Enterprises Corporation just paid a dividend and it expects that dividend to grow by 10 percent for the next three years. After that, the dividend is expected to grow at a constant rate of 5 percent in perpetuity. If the company's stock is cur..

  The common stock of auto deliveries sells

The common stock of Auto Deliveries sells for $26.96 a share. The stock is expected to pay $1.90 per share next year when the annual dividend is distributed. Auto Deliveries has established a pattern of increasing its dividends by 4.7 percent annuall..

  What is the length of the annuity time period

You are considering an annuity which costs $75600 today. The annuity pays $6900 a year. The rate of return is 6 percent. What is the length of the annuity time period? please provide numbers to enter into calculator.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd