Answer:
Present value of John's future annual earnings= 458,155.67
John should get life insurance equal to $450,000.
Step-by-step explanation:
Present value of an ordinary annuity
where PMT = the value of the individual payments in each period = $36,000
i = the interest rate that would be compounded in each compounding period = 0.069
n = the number of payment periods = 35
Present value of John's future annual earnings = = 458,155.67
458,155.67 rounded up to the nearest $50,000 is $450,000. therefore John should get life insurance equal to $450,000.
