Accounting 2101/6101 -Additional exercises-Chapter 6 and Chapter 7 Professor Louis P D'Elia Page 1 REVIEW SESSION #5 1) The Stanley Company deposited $30,000 into a fund on January 1, 20x1 that is earning interest at an annual rate of 12%, what amount will be in the fund on January 1, 20x6 if the interest is compounded semi-annually? 2) Andrew Adams decided to plan for retirement as follows: On his 30h birthday, he started to make annual contributions of $5,000 into a retirement fund. The fund has a rate of return of 9%, compounded annually. He made 30 contributions into this fund, the last payment being on his 59h birthday. He wanted to start depleting the fund at the rate of $75,000 a year, with the first payment starting on his 60th birthday. His hope was to remove $75,000 a year for 30 years (i.e, 30 payments out of the retirement fund). REQUIRED: a) What is the total accumulation in the fund on his 60th birthday? $ b) Is the total accumulation on his 60th birthday sufficient to yield the $75,000 withdrawals each year for the next 30 years? Yes or No (circle one) c) What is the amount of the annual shortaRe? d) What total accumulation would be needed on his 60th birthday to yield withdrawals of $75,000 per year? 3) Mr. Bock inherited some money on his 40th birthday. He decided to take a portion of it and invest it in a retirement fund for 20 years, at an 8% interest rate, compounded annually. He wants to withdraw $80,000 on each of his birthdays, starting at his 60th birthday. How much money would he have to invest on his 40th birthday to enable him to make annual withdrawals of $80,000 for 30 years