[Solved] Doug and Cheryl Have a Newborn Child and Are Shopping

Question 109
Multiple Choice
Question 109

Doug and Cheryl have a newborn child and are shopping for life insurance. Doug earns $100,000 a year and Cheryl cares for their child. They have a $300,000 mortgage with 20 years remaining and are concerned if something were to happen to Doug, how their family can manage. If they wish to cover the family expenses until the child turns 20, approximately how much term insurance would they purchase? (Assume the expected annual return is 6%.)

A) $846,992.
B) $1,000,000.
C) $1,146,992.
D) $1,300,000.

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