1] The first step is to find the FV of the annuity
of $8500
for 16 years, EOY 16. It is:
= 8500*(1.07^16-1)/0.07 = $237,048.46
FV of the above amount at EOY 30 = 237048.06*1.07^14
= $611,236.52
Less: FV of the amount withdrawn = 28000*1.07^7 =
$44,961.88
Amount in the account 30 years from today
$566,274.64
2] Amount to be deposited today = 4000/1.06^8 =
$2,509.65
Note that the number of periods is 4*2 = 8 half years
&
the interest rate per period is 12%/2 =
6%.
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