Joetta Hernandez is a single parent with two children and earns

$38,600

a year. Her employer's group life insurance policy would pay 2.5 times her salary. She also has

$51,467

saved in a 401(k) plan,

$4,289

in mutual funds, and a

$2,573

certificate of deposit. She wants to purchase term life insurance for 15 years, until her youngest child is self-supporting. She is not concerned about her outstanding mortgage, as the children would live with her sister in the event of Joetta's death. Assuming she can receive a

2

percent after-tax, after-inflation return on insurance proceeds, use the earnings multiple method to calculate her insurance need. How much more insurance does Joetta need to buy? What other information would you need to know to use the needs approach to calculate Joetta'sinsurance coverage?

.

Assuming she can receive a

2

percent after-tax, after-inflation return on insurance proceeds and using the earnings multiple method, Joetta's insurance need is

$enter your response here.

(Round to the nearest dollar.)

19 in mutual funds he event of Joettas on would you nog n 1 1% 0.990 1.970 2941 3.902 4 853 5795 6.728 1.652 AGOREOGAN 2% 0.980 1942 2 884 3.808 4.713 5601 6.472 7.325 8.182 8.983 9.7871 10.5751 11.348 12.106 12 849 13.578 14.292 14.9921 Present Value of an Annuity of $1 (PVIFA) 3% 4% 5% 6% 7% 0971 0.962 0.952 0.943 0935 1913 1886 1859 1833 1.808 2829 2775 2723 2673 2.624 3717 3830 3546 3,465 3.387 4.580 4.452 4.329 42121 4.100 5.4171 5.242 5,076 4 917 4.767 6.230 6.002 5.786 5,582 5.389 7020 6733 6463 6210 5.971 7.786 7435 7.108 6.802 6.515 8530 8 111 7722 7360 7024 9.253 8.760 8306 7 887 7.490 9 954 9385 8 8.863 8.384 7,943 10 635 9.986 9394 8 853 8.358 11.296 10.583 9.899 9.295 8.745 11.938 11118 10.380 9.712 9.108 12.581 11.852 10.838 10.106 9.447 13 166 12.166 11 274 10.4771 9.783 13 754 12 659 11 690 10828 10.059 8,566 9 471 10368 11 255 12 134 13.004 13.8651 14.718 15 562 16.398 8% 01926 1783 2.5771 3,312 3.993 4.623 5 200 5.74% 6247 6.710 7139 7536 7.904 8/244 8.559 8.851 9132 9.3721 9% 0917 1759 2531 3.240 3890 4.488 5,033 31535 5.998 6:418 6.805 7.161 7.487 7.786 8061 2 313 8,544 8 756 10% 0 000 1730 2.487 3.170 3.791 4355 4.888 5.335 5750 6.145 6.495 0814 7 103 7367 7 606 7824 8022 8. 201 12 13 14