A family wants to have a $160,000 college fund for their children at the end of 15 years. What contribution must be made at the end of each quarter if their investment pays 7.7%, compounded quarterly? (a) State whether the problem relates to an ordinary annuity or an annuity due. o ordinary annuity annuity due (b) Solve the problem. (Round your answer to the nearest cent.)
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- Grandparents plan to open an account on their grandchild's birthday and contribute each month until she goes to college. How much must they contribute at the beginning of each month in an investment that pays 7%, compounded monthly, if they want the balance to be $170,000 at the end of 18 years? (a) State whether the problem relates to an ordinary annuity or an annuity due. (b) Solve the problem. (Round your answer to the nearest cent.)You would like to have enough money saved to receive a $90,000 per year perpetuity after retirement. The annual interest rate is 8 percent. Required: How much would you need to have saved in your retirement fund to achieve this goal? a) Assume that the perpetuity payments start on the day of your retirement. b) Assume that the perpetuity payments start one year from the date of your retirement.Grandparents plan to open an account on their grandchild's birthday and contribute each month until she goes to college. How much must they contribute at the beginning of each month in an investment that pays 7%, compounded monthly, if they want the balance to be $200,000 at the end of 18 years? (a) State whether the problem relates to an ordinary annuity or an annuity due. ordinary annuity annuity due (b) Solve the problem. (Round your answer to the nearest cent.)
- K (Solving for PMT of an annuity) To pay for your child's education, you wish to have accumulated $15,000 at the end of 15 years. To do this, you plan on depositing an equal amount into the bank at the end of each year. If the bank is willing to pay 6 percent compounded annually, how much must you deposit each year to reach your goal? To reach your goal, your annual deposit must be $ (Round to the nearest cent.)It is estimated that you will pay about $80,000 into the Social Security system (FICA) over your 40-year work span. For simplicity, assume this is an annuity of $2,000 per year, starting with your 26th birthday and continuing through your 65th birthday. Solve, a. What is the future equivalent worth of your Social Security savings when you retire at age 65 if the government’s interest rate is 6% per year? b. What annual withdrawal can you make if you expect to live 20 years in retirement? Let i= 6% per year.Kate Rose is setting up an annuity for a memorial scholarship. What lump sum does she need to set aside today at 7% annual interest to have the scholarship pay $3,000 annually for 10 years? E Click the icon to view the table. Today she needs to set aside $ (Round to the nearest cent as needed.)
- (Solving for PMT of an annuity) To pay for your child's education, you wish to have accumulated $15,000 at the end of 7 years. To do this you plan on depositing an equal amount into the bank at the end of each year. If the bank is willing to pay 9 percent compounded annually, how much must you deposit each year to reach your goal? To reach your goal, your annual deposit must be $nothing. (Round to the nearest cent.)(Solving for i of an annuity) You lend a friend $30,000, which your friend will repay in five equal annual end-of-the year payments of $10,000, with first payment to be received 1 year from now. What rate of return does your loan receive?← A newborn child receives a $8,000 gift toward a college education from her grandparents. How much will the $8,000 be worth in 19 years if it is invested at 5.9% compounded quarterly? It will be worth $ (Round to the nearest cent.)
- You would like to have enough money saved to receive a growing annuity for 25 years, growing at a rate of 4% per year, the first payment being $60,000 after retirement, so that you and yourfamily can lead a good life. How much would you need to save in your retirement fund toachieve this goal? (assume that the growing perpetuity payments start one year from the date ofyour retirement. The interest rate is 12%)?Assume that Social Security promises you $43,000 per year starting when you retire 45 years from today (the first $43,000 will get paid 45 years from now). If your discount rate is 5%, compounded annually, and you plan to live for 17 years after retiring (so that you will receive a total of 18 payments including the first one), what is the value today of Social Security's promise? ... The value today of Social Security's promise is $ the nearest cent.) (Round toSuppose you wish to retire forty years from today. You determine that you need $50,000 per year once you retire, with the first retirement funds withdrawn one year from the day you retire. You estimate that you will earn 6% per year on your retirement funds and that you will need funds up to 25 years after retirement. Use the PV of an ordinary annuity due formula. a) Calculate the amount you must deposit in an account today so that you have enough funds for retirement b) Calculate the amount you must deposit each year, starting one year from today, so that you have enough funds for retirement.