What face value of life insurance

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Anne and Mark have decided that they would each need $25,000 annually over a 7 year period to cover income replacement in the event of the death of either Anne or Mark. Anne and Mark do NOT participate in Social Security. Based only on these income replacement needs, what face value of life insurance is needed for both Anne and Mark (just calculate for one-they both have the same need)? Assume that Anne and Mark have no other resources to put toward this need and that they would invest the life insurance proceeds in an account returning a 4% real annual rate of return.

Reference no: EM131555052

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