Q1

The Calvarusos 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?

Q2

How much would a business have to invest in a fund to receive $15,000 at the end of every month for 6 years? The fund has an interest rate of 4.50% compounded monthly and the first withdrawal is to be made in 4 years and 1 month.