Ch 12 Practice Problems.docx

# Ch 12 Practice Problems.docx - PRACTICE FINANCIAL PLANNING...

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PRACTICE FINANCIAL PLANNING PROBLEMS (p. 438) 1. Calculating Life Expectancy . Using Exhibit 12-1, determine the life expectancy of a 40-year old male. 2. Calculating Life Expectancy . Using Exhibit 12-1, determine the average numbers of additional years males alive at age 35 may expect to live. 3. Calculating Life Expectancy . Using Exhibit 12-1, determine the life expectancy of a 60-year-old female. 4. Calculating the Amount of Life Insurance Needed Using the Easy Method. You are the wage earner in a “typical family,” with \$50,000 gross annual income. Use the easy method to determine how much life insurance you should carry. 5. Calculating the Amount of Life Insurance Needed Using the Easy Method. Suppose that yours is a typical family. Your annual income is \$45,000. Using the easy method, what should be your need for life insurance? 6. Estimating Life Insurance Needs Using the DINK Method . 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 an \$80,000 mortgage, and you owe \$15,000 on car loans, \$5,000 in personal debt, and \$2,000 in credit card loans. You have no other debt. You have no plans to increase the size of your family in the near future.

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