Question

Calculate the total life insurance needs of an individual with the following circumstances: spouse & 3 children require $80,000/year for living for 15 years and requires $100,000 in 12 years for education. After 15 years your spouse would need $60,000/year for 25 years. Use a time value of money or discount rate of 3%. Calculate the amount required to meet all of these financial needs. Round your answer to the nearest dollar.

Answer 1

PV of Living Expenses	$955,034.81
PV of education	$70,137.99
PV of spouse expenses	$670,610.21
Total amount required	$1,695,783.01

Workings:

PV of Living Expenses	$955,034.81
PV of education	$70,137.99
Value of spouse expenses after 15 years	$1,044,788.86
PV of spouse expenses	$670,610.21
Total amount required	$1,695,783.01

Book1- Excel AutoSave Oi Sign in Comments Share O Tell me what you want to do File Home Formulas Review View Help Insert Draw Page Layout Data Σ X Insert = = A A Calibri 11 General Delete Conditional Format as Cell Sort & Find & Paste B IU A Format T T Formatting Table Filter Select Styles Clipboard Alignment Number Styles Cells Editing Font г. PV of Living Expenses B2 A В C D E PV of Living Expenses PV(3%,15,-80000) =PV(3%,12,-100000) 2 PV of education Value of spouse expenses after 15 years =PV(3%,25,-60000) PV of spouse expenses 4 PV(3%,15,-C4) 5 6 Total amount required 7 C2+C3+C5 8 9 10 11 12 13 14 15 16 17 Sheet2 Sheet3 Sheet6 Sheet7 Sheet8 Sheet1 Sheet4 Sheet5 Sheet9 She. +100 % Ready E w ха P3 ENG (? 3:40 PM