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Don and Diane Are Updating Their Financial Plan and Are

question 72

Essay

Don and Diane are updating their financial plan and are concerned that they might not have enough life insurance coverage for their family,which includes two children,ages 5 and 9.They have determined that their annual income is $65,000 and their net worth is now $150,000.Using the easy method,calculate the amount of life insurance they should carry.


Definitions:

Employee

Individual hired by a company or another person to conduct tasks, services or jobs for compensation.

Deposit Today

The act of placing money into a financial account or investment at the current date.

Discount Rate

The interest rate used to discount future cash flows to their present value, essential in the valuation of investments and projects.

Prepaid

Expenses paid in advance for goods or services to be received in the future.

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