Question
A young couple wants to have a college fund that will pay $25,000 at the end of each half-year for 8 years.(a) If they can
A young couple wants to have a college fund that will pay $25,000 at the end of each half-year for 8 years.(a) If they can invest at 6%, compounded semiannually, how much do they need to invest at the end of each 6-month period for the next 18 years to begin making their college withdrawals 6 months after their last investment? (Round your answer to the nearest cent.)(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? (Round your answer to the nearest whole number.)
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started