Q1

Adrian set up a fund that would pay her family $3,000 at the beginning of every month, in perpetuity. What was the size of the investment in the fund if it was earning 5.50% compounded semi-annually?

Q2

The Anifowoses have decided to invest in a college fund for their young son. They invested $40,000 in a deferred annuity that will pay their son at the beginning of every month for 4 years, while he goes to college. If the account earns 3.50% compounded monthly and the annuity payments are deferred for 13 years, what will be the size of the monthly payments?