Family Economic Issues

1. You are determined to have at least one million dollars on the day you retire.  How much will you need to save each year over the next 40 years of your career in order to meet this goal of $1,000,000 assuming you put you money into an account that averages 10% each year? 

 

2. Congrats on buying your first home.  You were able to take out a loan for $225,000 at 7% interest for a thirty year loan. (A)What will your monthly mortgage payments be? (B) How much goes to interest the first month?  (C) How much goes to principal the first month?

 

 

 

 

3. You and your spouse just adopted twin girls, little Heather and Beth.  You want to make sure they are taken care of for the next 22 years. (A)Based on the following information, how much life insurance needs to be purchased for the husband using the income approach, if any?  (B) How much, if any, needs to be purchased for the wife using the income approach?   Assume 3% inflation rate. 

               

	Market Labor Value	Household Production Value
Husband	$72,000	$15,000
Wife	$15,000	$40,000