Peter has a mortgage loan with an outstanding balance of $3 million; he needs to pay $10,000
Question:
Peter has a mortgage loan with an outstanding balance of $3 million; he needs to pay $10,000 to support his family monthly; he has an 18-year-old son who will articulate to a self-funded university in Hong Kong tomorrow. His son’s university programme will last for 4 years with tuition fee to be adjusted by the inflation rate. Assuming the inflation rate is 3% and will last for next 10 years; funds can always earn a return of 5% and his son’s university-related expenses including tuition fee is $120,000 per year; calculate how much life insurance protection Peter needs if he wants to protect his family and his son for the next four years.
Requirements:
• 170 to 270 words for each question (+/- 10% is allowed)
• At least 1 reference from trustworthy sources for each question
• In-text citation and references at the end of the paper are required
*Students are required to show the detailed financial calculator inputs, including the mode(s) used.
Foundations of Finance
ISBN: 9780135160619
10th edition
Authors: Arthur J. Keown, John H. Martin, J. William Petty