Linda and Jeff Carland are preparing to recieve their first child. With her anticipated complications of the delievery, Linda is getting very serious on buying a life insurance that would compensate the financial loss for her family for the next 25 years, if she were to die. In her desirable life insurance, she wants to factor in $50,000 educational fund for her newborn baby. She also wants to pay off the remaining $70,000 of their home mortgage, and gives Jeff a six-month leave from work so he can better adjust to life after her death. Linda also figures out that a minimum of $6,000 would be needed for her burial. Given that her annual disposable income is $25,000, Jeff's annual income is $27,000, her social security check would be $802.00 a month for 15 years, and her current universal life insurance would cover $75,000.
Based on the total loss estimation by the "Needs Approach" calculate the amount of life insurance Linda needs to buy, given that the interest rate is 9.5%