A young couple wants to have a college fund that will pay $30,000 at the end...

A young couple wants to have a college fund that will pay $30,000 at the end of each half-year for 8 years.

(a) If they can invest at 6%, compounded semiannually, how much do they need to invest at the end of each 6-month period for the next 18 years to begin making their college withdrawals 6 months after their last investment? (Round your answer to the nearest cent.)

(b) Suppose 8 years after beginning the annuity payments, they receive an inheritance of $34,000 that they contribute to the account, and they continue to make their regular payments as found in part (a). How many college withdrawals will they be able to make before the account balance is $0? (Round your answer to the nearest whole number.)

Expert Solution

a: $5955.39

b 20

a	Amount required at start of college	$376,833.06
	Amount to invest every 6 months	$5,955.39

b	FV of the contributions	$376,833.06
	Fv of the inheritance	61407.78
	Total value after 18 years	438240.84
	Number of withdrawals	20

Calculations are as below

jeff jeffy answered 1 month ago

A family wants to have a $130,000 college fund for their children at the end of...

A family wants to have a $130,000 college fund for their children at the end of 16 years. What contribution must be made at the end of each quarter if their investment pays 7.2%, compounded quarterly? (a) State whether the problem relates to an ordinary annuity or an annuity due. ordinary annuity due (b) Solve the problem. (Round your answer to the nearest cent.) 2 If $5500 is deposited at the end of each quarter in an account that earns...

The Kucharskis have decided to invest in a college fund for their young son. They invested...

The Kucharskis have decided to invest in a college fund for their young son. They invested $30,000 in a deferred annuity that will pay their son at the beginning of every month for 4 years, while he goes to college. If the account earns 3.00% compounded monthly and the annuity payments are deferred for 15 years, what will be the size of the monthly payments?

Suppose a young couple deposits $600 at the end of each quarter in an account that...

Suppose a young couple deposits $600 at the end of each quarter in an account that earns 6.8%, compounded quarterly, for a period of 2 years. After the 2 years, they start a family and find they can contribute only $200 per quarter. If they leave the money from the first 2 years in the account and continue to contribute $200 at the end of each quarter for the next 18 1/2 years, how much will they have in the...

You set up a college fund in which you pay $2500 each year atthe end...

You set up a college fund in which you pay $2500 each year at the end of the year. How much money will you have accumulated in the fund after 10 years, if your fund earns 8% compounded annually?

1) A young couple wishes to accumulate $35,000 at the end of four years so that...

1) A young couple wishes to accumulate $35,000 at the end of four years so that they may make a down payment on a house. What should their equal end-of-year deposits be accumulate the $35,000, assuming a 6% rate of interest? a. $7,718 b. $8,000 c. $6,915 d. $8,765 2) The future value of $3,000 deposited at 11% compounded quarterly for each of the next six years is a. $5,211 b. $5,611 c....

2. A couple wants to save money for their child's college education. They deposit their money...

2. A couple wants to save money for their child's college education. They deposit their money in the bank at 6% interest. How many thousand dollars should be deposited in the bank annually from the age of 2 to the age of 17 so that a child from 18 to 21 years old can receive $ 501072 worth of money each year? (Interest will continue to be applied to the money other than the amount withdrawn from the account.)

Loan of EGP 30,000 is taken out. A sinking fund is set up to pay back...

Loan of EGP 30,000 is taken out. A sinking fund is set up to pay back the EGP 30,000 in one lump sum at the end of 5 years. The sinking fund earns j4 = 4% and deposits are made Quarterly. Find the book value of the debt after 3 years.

You work in a "planning" clinic and follow a young couple who are planning to have...

You work in a "planning" clinic and follow a young couple who are planning to have a first child soon. Unfortunately the couple experiences some difficulties.Several months later and after several attempts, you have a second meeting with the couple who failed to give birth. You ask thishave a blood sample taken from them. The woman's blood work returns to normal, except for a low levelovarian hormones. Note that the woman is, at this time, in the phase luteal of...

Suppose that a young couple has just had a baby boy, and they wish to have...

Suppose that a young couple has just had a baby boy, and they wish to have enough saved to fund four years of college education at a school like UCLA when their son is at the ages of 19-22. Suppose this year’s total expense of an undergraduate student at WashU, including tuition, room and board, books and supplies, amounts to $74,000. This annual cost is expected to grow at 3.5% a year. To simplify the timeline, they assume that all...

Trena has agreed to pay Jayme the following payments: 30,000 at the end of 2 years;...

Trena has agreed to pay Jayme the following payments: 30,000 at the end of 2 years; 50,000 at the end of 5 years; and 10,000 at the end of 8 years. You are given that v=0.9. Calculate the Modified duration of Trena's liability.

Question