A young couple wants to have a college fund that will pay $30,000 at the end of
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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 8%, compounded semiannually, how much do they need to invest at the end of each 6-month period for the next 18 years in order to begin making their college withdrawals 6 months after their last investment?
(b) Suppose 8 years after beginning the annuity payments, they receive an inheritance of $38,000 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?
AnnuityAn annuity is a series of equal payment made at equal intervals during a period of time. In other words annuity is a contract between insurer and insurance company in which insurer make a lump-sum payment or a series of payment and, in return,...
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The couple wants an annuity with R 30000 and n 8 2 16 We ...View the full answer
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Related Book For 
Mathematical Applications for the Management Life and Social Sciences
ISBN: 978-1305108042
11th edition
Authors: Ronald J. Harshbarger, James J. Reynolds
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