Question

I am establishing a savings account paying 6% annual return to fund a portion of my son’s college tuition. I want to make a withdrawal of an equal amount from the savings at the end of each of his first 4 years of college. I will have $24,256 in the savings account when he begins college and will keep the account open for 4 years. Identify the details below that I need in order to determine the dollar amount I can withdraw each year.

What table must I use to find the relevant factor?

- Future value of single-sum
- Present value of single-sum
- Future value of ordinary annuity
- Present value of ordinary annuity

What is the interest rate to find the relevant factor?

What are the number of periods (n) to find the relevant factor?

What is the dollar amount I can withdraw each year?

Answer #1

I want to establish a savings account today, providing 24%
annual interest compounded monthly, so that I can withdrawal $6,000
at the end of each of the next 3 years. Identify the details below
that I need in order to determine how much money I must have in the
savings account today.
What table must I use to find the relevant factor?
Future value of single-sum
Present value of single-sum
Future value of ordinary annuity
Present value of ordinary annuity...

I would like to retire in 2034 and to have a savings account
that allows me to withdraw $30,000 per year, at the end of each
year, beginning in 2034 and continuing through 2045. I found a fund
that earns 4% annual return. To develop the necessary savings for
my withdrawals, I intend to make equal deposits at the end of each
of the years 2021 through 2033.
Two required considerations:
FIRST: Identify the details below that I need in...

I am making an investment today in an account providing 3%
annual interest compounded annually. Identify the details below
that I need in order to determine the dollar amount I must invest
today in order to have $50,000 in 5 years.
What table must I use to find the relevant factor?
Future value of single-sum
Present value of single-sum
Future value of ordinary annuity
Present value of ordinary annuity
What is the interest rate to find the relevant
factor?
What...

6. Tom and Mary have saved $100,000 to finance their daughter
Jenny’s college education. They deposited the money in the
Arrowhead Savings and Loan Association, where it earns 5% interest
compounded semiannually. What equal amounts can their daughter
withdraw at the end of every 6 months during her 4 college years,
without exhausting the fund?
Instructions: use the Compound interest tables to
solve
-Future value of 1 (future value of a single sum)
-Present value of 1 (present value of...

Your parents established a savings account for your college
education by making annual deposits of $10,000 at the beginning of
each of 5 years to a savings account paying 10%. At the end of the
5th year, the account balance was transferred to a bank paying 10%,
and annual deposits of $10,000 were made at the end of each year
from the sixth through the eleventh years. What was the account
balance at the end of the eleventh year? Future...

Jan Green established a savings account for her son's
college education by making annual deposits of $10,000 at the
beginning of each of 5 years to a savings account paying 10%. At
the end of the 5th year, the account balance was transferred to a
bank paying 10%, and annual deposits of $10,000 were made at the
end of each year from the sixth through the eleventh years. What
was the account balance at the end of the eleventh year?...

Instructions: use the correct Compound interest table to
solve
-Future value of 1 (future value of a single sum)
-Present value of 1 (present value of a single sum)
-Future value of an ordinary annuity of 1
-Present value of an ordinary annuity of 1
-Present value of an annuity Due of 1
A. If $4,000 is deposited into an investment account yielding
10% every 6 months starting on 1/1/2018, what amount will be
available in the investment account in...

Problem 5-40
Required annuity payments
A father is now planning a savings program to put his daughter
through college. She is 13, she plans to enroll at the university
in 5 years, and she should graduate in 4 years. Currently, the
annual cost (for everything - food, clothing, tuition, books,
transportation, and so forth) is $13,000, but these costs are
expected to increase by 5% annually. The college requires that this
amount be paid at the start of the year....

Problem 5-40
Required annuity payments
A father is now planning a savings program to put his daughter
through college. She is 13, she plans to enroll at the university
in 5 years, and she should graduate in 4 years. Currently, the
annual cost (for everything - food, clothing, tuition, books,
transportation, and so forth) is $13,000, but these costs are
expected to increase by 5% annually. The college requires that this
amount be paid at the start of the year....

Problem 5-40
Required annuity payments
A father is now planning a savings program to put his daughter
through college. She is 13, she plans to enroll at the university
in 5 years, and she should graduate in 4 years. Currently, the
annual cost (for everything - food, clothing, tuition, books,
transportation, and so forth) is $13,000, but these costs are
expected to increase by 5% annually. The college requires that this
amount be paid at the start of the year....

ADVERTISEMENT

Get Answers For Free

Most questions answered within 1 hours.

ADVERTISEMENT

asked 3 minutes ago

asked 31 minutes ago

asked 31 minutes ago

asked 33 minutes ago

asked 49 minutes ago

asked 1 hour ago

asked 1 hour ago

asked 1 hour ago

asked 1 hour ago

asked 1 hour ago

asked 1 hour ago

asked 1 hour ago