# Just Before His First Attempt At Bungee Jumping John Decides To Buy A Life Insur

Just before his first attempt at bungee jumping, John decides to buy a life insurance policy. His annual income at age 30 is\$36,000, so he figures he should get enough insurance to provide his wife and new baby with that amount each year for the next 35 years. If the long-term interest rate is6.9%, what is the present value of John’s future annual earnings? (Round your answer to the nearest cent.)

\$

Rounding up to the next \$50,000, how much life insurance should he buy? (Round your original answer to the nearest \$50,000.)

Present Value ===== (36000 / 6.9%) (1 – (1+6.9%)^(-35))(521739.13) (1-(1.069)^(-35))(521739.13) (1-0.096779)(521739.13) (0.903221)471,245.74 Present value of John’s future earnings are…

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