How much life insurance should he buy

Assignment Help Finance Basics
Reference no: EM13260982

Just before his first attempt at sky diving, Peter decides to buy a life insurance policy.

His annual income at age 30 is $39,000, so he figures he should get enough insurance to provide his wife and kids with that amount each year for the next 35 years. If the long-term interest rate is 6.4%, what is the present value of Peter's future annual earnings?

And then rounding up to the next $50,000 how much life insurance should he buy?

 

Reference no: EM13260982

Questions Cloud

Find the magnitude and direction of the second piece : A fireworks rocket is launched vertically into the night sky with an initial speed of 40 m/s. find the magnitude and direction of the second piece
What is your initial research question : What is your initial research question and what do you feel to be the answer to this question, and why - what is the local issue that your argument and research address?
What is dybvigs cost of equity capital : If the risk-free rate is 4.50 percent and the expected return on the market is 12 percent, what is Dybvig's cost of equity capital?
What is the speed of the four cars after the collision : A railroad car of mass 2.58 104 kg is moving with a speed of 3.88 m/s. It collides and couples with three other coupled railroad cars, What is the speed of the four cars after the collision
How much life insurance should he buy : And then rounding up to the next $50,000 how much life insurance should he buy?
What is the minimum angle of incidence : A plastic light pipe has an index of refraction of 1.49. For total internal reflection, what is the minimum angle of incidence if the pipe is in the following media
Determine the magnitude of the torque exerted on the dipole : An electric dipole has opposite charges of 5.0x10^-15 C separated by a distance of .40mm. It is oriented at 60 degrees with respect to a uniform electric field of magnitude 2.0x10^3 N/C. Determine the magnitude of the torque exerted on the dipole ..
Caculate how long does it take to boil a cup of water : A device for heating a cup of water in a car connects to the car's battery, which has an emf EMF = 10.0 V and an internal resistance r_int = 0.08 \Omega. The heating element that is immersed in the cup of water is a resistive coil with resistance ..
Which investment has the higher irr : You are deciding between two mutually exclusive investment opportunities. Both require the same initial investment of $10.5 million. Investment A will generate $2.03 million per year (starting at the end of the first year) in perpetuity.

Reviews

Write a Review

Finance Basics Questions & Answers

  Estimate the compound annual dividend growth rate

The chairman of Heller Industries told a meeting of financial analysts that he expects company's earnings and dividends to double over the next six years.

  Amortization expense

Dade buy a patent on January 1, 2003 for $120,000. The patent had a remaining useful life of ten years at that date. In January 2004, Dade successfully defends patent at a cost of $54,000,

  Would a supply chain make sense in regional production

Would a supply chain make sense in regional production as backup facilities to China? For example, having facilities in Europe and South America to become cost effective in competition with Asia should a disaster strike? Explain.

  How many years do these bonds have left until they mature

Backwater Corp. has 10 percent coupon bonds making annual payments with a YTM of 9.3 percent. The current yield on these bonds is 9.65 percent.

  Multinational subsidiary host balance of payments

You're chief executive officer of multinational's subsidiary in developing host country. The subsidiary has been in business for about 8 years, making electric motors for the host country's domestic market, with mediocre financial results.

  Determine average annual compound rate of return

The All-State Mutual Fund has the following 5 year record of performance: Determine this no-load fund's five year (2006-2010) average annual compound rate of return.

  Prepare an income statement

The adjusted trial balance columns of the worksheet for Goode Corporation are as follows:

  Is the realized yield higher or lower than promised yield

Compute the realized rate of return for investors who purchased the bonds when they were issued and who surrender them today in exchange for the call price. Is the realized yield higher or lower than the promised yield?

  Bond returns is consistent with this portfolio standard

Illustrate what correlation between the stocks also bond returns is consistent with this portfolio standard deviation.

  Find break-even point in units

ABC Corporation sell for $20 per unit, and the variable cost to produce them is $15. Gateway estimates that the fixed expenses are $80,000.

  Decision tree analysis-investment options

Marcal Corporation is considering foreign direct investment in Asia. The company approximates that the project would require an initial investment of $14 million. Discuss 2-3 factors other than the value of the real option that the company should c..

  What is yield to call (ytc)?

Ferris Incs bonds currently sell for $1,275 and have a par value of $1,000. They pay $120 annual coupon and have a 20-year maturity, but they can be called in 5 years at $1,120. What is their yield to call (YTC)?

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