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zimovet [89]
3 years ago
5

Your first baby was born yesterday and is healthy and strong. To guard against your premature death, you want to purchase a life

insurance policy that will replace $58,000 of your annual income until your child is 20 years old. How much life insurance should you purchase, if you assume a 3% inflation rate
Business
1 answer:
jeka57 [31]3 years ago
3 0

Answer:

assuming the  interest rate is = 15% the  life insurance should you should purchase = $497854.0773

Explanation:

Given that :

Annual income receipt = $58000

Assumption:

If we assume that the inflation rate π = 3% = 0.03

Also , let assume that the interest rate is = 15%  = 0.15 since it is not given too

Then the effective interest rate = \dfrac{ (i-\pi)}{(1+\pi)}

the effective interest rate = \dfrac{ (0.15-0.03)}{(1+0.03)}

the effective interest rate = \dfrac{ (0.12)}{(1.03)}

the effective interest rate = 0.1165

the effective interest rate = 11.65%

Since n = \infty

The Principal amount of how much life insurance should you purchase is;

= Annual income receipt/the effective interest rate

= $58000/ 0.1165

= $497854.0773

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Answer:

$66,700

b. LIFO = $70800

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Explanation:

LIFO means last in first out. It means that it is the last purchased inventory that is the first to be sold.

(8130 x 8) + [(9090 - 8130) x 6) = 70800

FIFO means first in, first out. It means that it is the first purchased inventory that is the first to be sold

(3010 x 6) + [(9090 - 3010) x $8] = 66,700

Average cost = [(3010 x 6) + (8130 x 8)] /

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The answer to this is true
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Indicate whether the following actions would increase, decrease, or not affect Indigo Inc.'s total assets, liabilities, and stoc
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Explanation:

The effects are as follows:

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b. In the second option, there is  No effect in any item of the financial statements

c. In the third option, there is No effect in any item of the financial statements

d. No impact on the assets but it increases the liabilities side and decreases the stockholder equity

The journal entry is shown below:  

Retained earning A/c Dr  XXXXX

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(Being cash dividend declared)  

When the dividend is declared, the dividend amount should be subtracted from the retained earning account.  

And, since the dividend is declared that increases the balance of dividend

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Answer:

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6 0
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Casey is the 12% marginal tax bracket, and Jean is in the 35% marginal tax bracket. Their employer is experiencing financial dif
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Answer:

Casey would prefer option 1; that he pays the premiums ($8,000). Even if Casey cannot deduct his insurance premiums as medical expenses, his income will only be reduced by $8,000. If he decided to take option 2, his income would be reduced by $8,800 (= $10,000 - 12%), so he is saving $800 by taking option 1.

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6 0
3 years ago
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