Question

Adriana is financially responsible for her aged parents. She wants to provide income for her parents for 15 years should she die. Adriana earns $48,000 after taxes and believes that her parents could live on 60 percent of her current income. If the insurance funds could be invested at 4 percent after taxes and inflation, how much life insurance does Adriana need

Answer 1

$342,720

Step-by-step explanation:

The amount of the life insurance needed is shown below:

= Earning after taxes × current income percentage × approximate interest factor

= $48,000 × 60% × 11.9

= $342,720

Basically we multiplied the earning after taxes with the current income percentage and the approximate interest factor so that the correct amount could arrive