To calculate the present value of Thompson's desired critical illness sum assured, we will need to use the time value of money formula. In this case, we have a series of equal payments (annuity). Thompson would like to receive RM60,000 per year over a period of 10 years. The adjusted rate of return is 2%. First, we will find the present value of the annuity. PV = PMT * [(1 - (1 + r)^(-n)) / r] Where: - PV = present value - PMT = payment amount per period (RM60,000) - r = interest rate per period - n = number of periods In this case: - PMT = RM60,000 - r = 0.02 (2% expressed as a decimal) - n = 10 PV = RM60,000 * [(1 - (1 + 0.02)^(-10)) / 0.02] PV = RM60,000 * [(1 - 0.8205) / 0.02] PV = RM60,000 * [0.1795 / 0.02] PV = RM60,000 * 8.9724 PV = RM538,346 Thompson would need a critical illness sum assured of RM538,346, but he would also like an additional RM80,000 for traditional treatment costs. To find the total critical illness sum assured, we add the two values: Total critical illness sum assured = RM538,346 + RM80,000 Total critical illness sum assured = RM618,346 Thompson would need a critical illness sum assured of RM538,346, plus an additional RM80,000 for traditional treatment cost. Therefore, his total critical illness sum assured would be RM618,346.