1. Dr. Virgil "Grim" Reaper, an elderly alumnus of SU, is going to establish a trust fund for his grandson's SU tuition. He plans to make three equal, annual payments, beginning today into an equity account that will yield 16 percent per year compounded semi-annually. How much will each have to be so that his grandson will have $30,000 to begin his SU studies in three years? [Hint: An end of period or beginning of period problem? Draw a good time line!!) (1.5) 2. How much (in equal payments) can you withdraw every six (6) months, starting six months from today, if you deposit $1,000 today in a bank that pays, 12 percent per year compounded quarterly. Assume your last withdrawal is 2 years from now and then you will have a zero balance. (Hint: What is your withdrawal in three (3) months? In nine (9) months? (1) 3. If you deposit $10,000 into a bank today that pays five percent per year, compounded continuously, how much can you withdraw, ten years from now, so your balance will be zero in ten years, if you withdraw $2,000, five years from now? e=2.7183 (1.5) 4. Which perpetuity would you prefer? Please show your work! (2) a) Payments of $12.50 every 3 months, to begin in 3 months. Time value of money is 12.55% per year. b) An initial payment of $38.50, a year from now, with subsequent annual payments to increase by 2.5% per year. Time value of money is 12% per year