BUSINESS MATH ASSIGNMENT 5 HOW MUCH IS ENOUGH Alex and Chris

BUSINESS MATH ASSIGNMENT 5 HOW MUCH IS ENOUGH? Alex and Christa are married and have two teenage children Alex works full-time as an electrical engineer and Christa works part-time as a floral designer. They own a modest 3-bedroom, 2- bath home on a ¼-acre lot and have two cars, and both have excellent credit. They recently attended a financial planning seminar that highlighted a number of issues, such as saving, investing, insuring, and tax and estate planning. Alex and Christa have decided to reassess their insurance needs to determine what portion of their budget should be designated for nsurance premiums They decide to review their auto insurance first. According to the literature they picked up, they live in territory 1. They own two cars, one of which is 2 years old and considered model class 1; the other is 6 years old and considered model class 2. They feel they should have S100/S300 bodily injury coverage, and S100,000 of property damage coverage. They decide to purchase comprehensive coverage $0 deductible and collision coverage with a $1,000 deductible on their newer vehicle, but they decide to forego comprehensive and collision coverage on their older vehicle. They both have excellent driving records, with no moving violations or at-fault accidents during the past 3 years Their insurance company allows a 5% discount for being accident free for 3 years and a 10% discount for insuring multiple vehicles

Solution

Solutions :

1)

Alex and Christa plan to spend annually on their automobile insurance is $1238.5

4 )

Annual premium of auto insurance = $1238.5

Annual premium of property insurance = $460.8

Annual premium of life insurance policy = $10,057.5

The total premium by adding the entire insurance premium as shown below :

Total premium = $1238.5 + $460.8 + $10,057.5 = $11,756.8