5. (a) Joshua Grant wants to save money to meet two objectives. First he would like to be able to retire thirty years from now and have a retirement income of $40,000 per year for at least twenty years. Second he would 1ike to purchase a cabin in the mountains ten years from now at an estimated cost of $50,000. He can only afford to save $7,000 per year for the first ten years. Joshua expects to earn 8 percent per year on average from investments over the next fifty years. What must his minimum annual savings be from years eleven through thirty to meet his objectives. 5 (b). Joe and June Green are planning for their children's education. Joe would like his kids to attend his alma mater where tuition is currently $25, 000 per year. Tuition costs aree to increase by 5 percent each year. Their children, David and Daniel, just turned 2 and 3 years old today, September 1, 2002 They are expected to begin college the year in which they turn 18 years old and each will complete his schooling in four years. College tuition must be paid at the beginning of each school year. Grandma Green invested $10,000 in a mutual fund the day each child was born. This was to begin the boys' college fund a combined fund for both children). The investment has earned and is expected to continue to earn 12 percent. Joe and June will now begin adding to this fund every August 31st ( beginning with August 31st, 2003) to ensure that there is enough money to send the kids to college 5. (a) Joshua Grant wants to save money to meet two objectives. First he would like to be able to retire thirty years from now and have a retirement income of $40,000 per year for at least twenty years. Second he would 1ike to purchase a cabin in the mountains ten years from now at an estimated cost of $50,000. He can only afford to save $7,000 per year for the first ten years. Joshua expects to earn 8 percent per year on average from investments over the next fifty years. What must his minimum annual savings be from years eleven through thirty to meet his objectives. 5 (b). Joe and June Green are planning for their children's education. Joe would like his kids to attend his alma mater where tuition is currently $25, 000 per year. Tuition costs aree to increase by 5 percent each year. Their children, David and Daniel, just turned 2 and 3 years old today, September 1, 2002 They are expected to begin college the year in which they turn 18 years old and each will complete his schooling in four years. College tuition must be paid at the beginning of each school year. Grandma Green invested $10,000 in a mutual fund the day each child was born. This was to begin the boys' college fund a combined fund for both children). The investment has earned and is expected to continue to earn 12 percent. Joe and June will now begin adding to this fund every August 31st ( beginning with August 31st, 2003) to ensure that there is enough money to send the kids to college