ADMS 3541 Study Guide - Midterm Guide: Cash Flow Statement, Paycheck, Text Figures
3 Jul 2017
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Greg (45) and annie (32) have 2 adopted children: michael age 5 and brandy age 17. A breakdown of his year end paystub follows: They have provided you with a cash flow statement and a net worth statement: Calculate insurance needs for michael and for annie using both the income and expense approaches. Use a discount rate of 3% for the calculations. You could ask a lot of questions in order to determine how to do the insurance estimates. A basic income method solution from victoria zaremba. Pv of -> pmt 65,000 i/y = 3% n = 20 pv = 950,000. Adjust by 75% rule of thumb = 712,500. Using text figures cpp benefits assuming max amount: Spouse survivor benefit 544 monthly until age 65. Pv of spousal survivor benefit pmt = 6,528 n = 33 i/y = 3% pv = 135,559. Pv of dependent benefits pmt = 2700 n = 1 i/y = 3% pv = 2,621.
