Obrien group wishes to accumulate funds to provide a retirement annuity for its vice president of research, Jill Moran. Ms. Moran will retire at the end of exactly 12 years. Upon retirement, she is entitled to receive an annual end-of-year payment of $42,000 for exactly 20 years. If she dies prior to the end if the 20-year period, the annual payments will pass to her heirs. During the 12 year "Accumulation period"Obrien wishes to fund the annuity by making equal annual end-of-year deposits into an account earning 9% interest. Once the 20-year "distribution period" begins, Obrien plans to move the accumulated monies into an account earning a guaranteed 12% per year. At the end of the distribution period, the account balance will equal zero. Note that the first deposit will be made at the end of year 1 and the first distribution payment will be received at the end of year 13.

A. Draw a time line depicting all of the cash flows associated with Obrien's view of the retirement annuity.

B. How large a sum must Obrien accumulate by the end of year 12 to provide the 20-year, $42,000 annuity?

D.How much would Obrien have to deposit annually during the accumulation period if it could

earn 10% rather than 9% during the accumulation period?

E.How much would Obrien have to deposit annually during the accumulation period if Ms.

Moran's retirement annuity was a perpetuity and all other terms were the same as initially

described?