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2. Janet, age 28, is married and has a son, age 3. She wants to determine how much life insurance she should own based on the capital retention...

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2. Janet, age 28, is married and has a son, age 3. She wants to determine how much life
insurance she should own based on the capital retention approach. She would like to
provide $30,000 each year before taxes to her family if she should die. She owns a house
jointly with her husband that has a current market value of $250,000 and a mortgage
balance of $100,000. She also owes $16,000 on a car loan and credit cards. She would
like to have the mortgage, car loan, and the credit card debts paid off if she should die.
She has no investment and her checking account balance in only $1,000. She owns an
individual life insurance policy in the amount of $100,000 that her parents purchased for
her when she was a baby. Estimated Social Security survivor benefits are $10,000
annually. Janet assumes that life insurance proceeds can be invested at 5% interest. Based
on the capital retention approach, how much additional life insurance, if any, should Janet
purchase to meet her financial goals?

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