You and your spouse are in good health and have reasonably secure jobs. Each of you makes about $40,000 annually. You own a home with a $100,000 mortgage, and you owe $11,000 on car loans, $2,000 in personal debt, and $3,000 in credit card loans. You have no other debt. You have no plans to increase the size of your family in the near future. You estimate that funeral expenses will be $5,000. Estimate your total insurance needs using the DINK method. Total insurance need

You and your spouse are in good health and have reasonably secure jobs. Each of you makes about $40,000 annually. You own a home with a $100,000 mortgage, and you owe $11,000 on car loans, $2,000 in personal debt, and $3,000 in credit card loans. You have no other debt. You have no plans to increase the size of your family in the near future. You estimate that funeral expenses will be $5,000. Estimate your total insurance needs using the DINK method. Total insurance need

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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You and your spouse are in good health and have reasonably secure jobs. Each of you makes about $38,000 annually. You own a home with a mortgage of $110,000, and you owe $11,000 on car loans, $2,000 in personal debt, and $3,000 in credit card loans. You have no other debt. You have no plans to increase the size of your family in the near future. You estimate that funeral expenses will be $5,000. Estimate your total insurance needs using the DINK method. Total insurance need
4. You and your spouse are in good health and have reasonably secure careers. You make about $75,000 annually and have opted for life insurance coverage of three times your salary through your employer. With your spouse's income, you are able to absorb ongoing living costs of $55,000 a year. You own a home with a $290,000 mortgage. Other debts include a $15,000 car loan, $7,000 student loan, and $4,000 charged to credit cards. In the event of your death, you wish to leave your family debt-free. One of your most important financial goals involves building an education fund of $100,000 to cover the costs of a four-year university program for each of your two children ages two and four. To date, you have accumulated $25,000 toward this goal in an RESP. Should you die, your beneficiaries would receive a $2,500 death benefit lump-sum payment from the Canada Pension Plan. You also have $35,000 in your company pension plan. Average funeral expenses are $13,800. Your other financial assets are…
Problem “Suppose that your parents are willing to lend you $20,000 for part of the cost of your college education and living expenses. They want you to repay them the $20,000 without any interest, in a lump sum 15 years after you graduate, when they plan to retire and move. Meanwhile, you will be busy repaying federally guaranteed loans for the first 10 years after graduation. But you realize that you won’t be able to repay the lump sum without saving up. So you decide that you will put aside money in an interest-bearing account every month for the first five years before the payment is due. You feel comfortable with setting aside $275 a month (the amount of the payment on your college loans, which will be paid off after 10 years). How high an annual nominal rate on savings do you need to accumulate the $20,000, in 60 months, if interest is compounded monthly? Enter into a spreadsheet the values of d = 275, r = 0.05 (annual rate), and n = 60, and the savings formula…
You and your spouse are in good health and have reasonably secure careers. Each of you makes about $53,000 annually. You own a home with a mortgage of $106,000, and you owe $28,000 on car loans, $11,000 in personal debts, and $5,000 on credit card loans. You have no other debts. You have no plans to increase the size of your family in the near future. Assume funeral expenses of $9,000. Estimate your total insurance needs using the DINK method. Insurance need
You and your spouse are in good health and have reasonably secure careers. Each of you makes about $40,000 annually. You own a home with an $80,000 mortgage, and you owe $15,000 on car loans, $5,000 on personal debts, and $4,000 on credit card loans. You have no other debt. You have no plans to increase the size of your family in the near future. Estimate your insurance needs using the DINK method. Show work!
You have just inherited $30,000 tax free from your grandfather's estate. You currently have: no savings or retirement; two small credit card balances of $1,200 and $1,650 at 14.99%; an auto loan of $15,350 at 3.69%; and a mortgage with an unpaid balance of $147,500 at 4.25%. Research Dave Ramsey's 7 Baby Steps. If you follow Dave's plan, what should you do with your money?
Suppose that your parents are willing to lend you $20,000 for part of the cost of your college education and living expenses. They want you to repay them the $20,000, without any interest, in a lump sum 15 years after you graduate, when they plan to retire and move. Meanwhile, you will be busy repaying federally guaranteed loans for the first 10 years after graduation. But you realize that you won’t be able to repay the lump sum without saving up. So you decide that you will put aside money in an interest-bearing account every month for the five years before the payment is due. You feel comfortable with putting aside $275 a month (the amount of the payment on your college loans, which will be paid off after 10 years). How high an annual nominal interest rate on savings do you need to accumulate the $20,000 in 60 months, if interest is compounded monthly? Enter into a spreadsheet the values d 5 275, r 5 0.05 (annual rate), and n 5 60, and the savings formula with r replaced by r/12 (the…
A couple in their 70s with no liens on their home would like some extra income, but don't want to make monthly loan payments. What kind of loan might a lender offer them? A- A reverse equity loan, since they are over 62 and have sufficient equity in their home B A reverse equity loan, since they are over the age of 35 C- A reverse equity loan, but the couple will need to make monthly payments D - None; a lender will probably refuse to lend to anyone over the age of 62 -
In this question we are going to look at how small differences in your saving and spending practices can have big effects on your future financial circumstances. After paying all of your yearly rent/mortgage payments as well as other living costs like food and electricity, you have $2000 left over. You have the option of spending or saving this money or a combination of both. You are 21 today and you plan to retire when you are 65. If you put money in your savings account you will receive 5% per year compounded yearly. Make a diagram that shows how much you have in savings in each of the following cases: A. You spend $1500 and save $500 B. You spend $1000 and save $1000 C. You spend $500 and save $1500 D. You spend $0 and save $2000 Graph all situations on one graph. Assume that the amount of money you have after your living costs is constant at $2000 throughout your working life. thanks!!
Hi I have a question regarding Austrlian Retirement and Financial Planning. In this example, the couple are retired and one of them is ill and looking for a retirement home, the home is going to cost $450,000 deposit. Neither of the couple work and draw 50,000 from their super in order to stay afloat. They have 20,000 and 562,000 in super combined, have a 900,000 dollar home. They also have 10,000 worth of home contents, a 15,000 dollar vehicle, and 55,000 cash in the bank. It is important to note they have 0 debt and everything is fully paid off. Neither of them have ever received pension money or government support. Myrtle wishes to put bob in an aged care facility, and when that is done she wants to return to work part time. 1. How will Myrtle's income be funded of $40,000 per annum be financed now, in the future and when she retires in 10 years time?
Kaleb Makes a salary of $5,000 per month and has no other loans. What maximum amount of monthly home paymment ( mortgage, insurance, and property tax) can he realistically afford? 1. $750 2. $1,500 3. $2,500 4. $2,750 5. $4,250
6. You have saved up some money for your retirement. You end up living 20 years after your retirement. The first year you receive $50,000 from your retirement account and then each following year you receive $2000 more due of Cost-of-Living adjustment. Meaning, in year 1 you receive $50,000, year 2 $52,000, year3 $54000, etc. How much money had you saved for retirement. Do not use excel, please work the problem out. Also include cashflow diagram if possible.

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