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Based on the Human Value Approach, What Death Benefit Amount

question 24

Essay

Based on the human value approach, what death benefit amount would you suggest to your client given the following facts: 20 years until retirement, projected average annual income of $125,000, average projected work-related expenses, taxes and self-maintenance of $36,000, and a discount rate of 5 percent?


Definitions:

RRSP

Registered Retirement Savings Plan, a Canadian investment account for holding savings and investment assets, with certain tax benefits.

Compounded Monthly

A method that involves computing interest for a month by adding it to both the original principal sum and the interest that has been accumulated from past periods.

Conditional Sale Contract

A sales agreement that transfers the title of an item to the buyer only after certain conditions, typically payment completion, are met.

Compounded Monthly

Interest calculation method where interest is added to the principal every month, affecting subsequent interest calculations.

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