Roberto is married and has two children. He wants to be sure that he has sufficient life insurance to take care of his family if he dies. Roberto’s wife is a homemaker but attends college part-time, pursuing a finance diploma. It will cost approximately $40 000 for her to finish her education. Since their children are teenagers, Roberto feels that he will need to provide the family with income for only the next 10 years. He further calculates
that the household expenses run approximately $35 000 per year. The balance on the home mortgage is $30 000. Roberto set up an education fund for his children when they were babies and it currently contains a sufficient amount for them to attend college or university. Assuming that Roberto’s wife can invest the insurance payments at eight percent, calculate the amount of insurance Roberto needs to purchase.