QUESTION NO: 2

Starbuck industries wishes to accumulate funds to provide a retirement annuityandfor its vice president jill moran. MS moran by contract will retire at the end of exactly 12 years upon retirement she is entitled to receive an annual end of the year payment of 42000 for exactly 20 years if she dies period to the end of 20 years period the annual payment will pass to her highest during the 12 years accumulation period stop wishes to find the enmity by making equal annual end of the year deposit into an account earning 9% interest once the year 20 year and distribution period begin stop back planes to move the accumulated my knees into an account earning are generated 12% per year at the end of distribution period the account balance will be equal to zero note that the first deposit will be made at the end real one and deepest distribution payment will be received at the end of year 13.

Required:

1: Draw a timelinedepictingall the cash flows associated with Starbucks views of retirement annuity.

2: how large a sum of Starbucks accumulated by the end of year 12 to provide 20 years dollar 42000 annuity?

3: how largemasterbucks equal annual end of the yearl deposit into the account by over 12 years accumulation periodto fundfinely MS morals retirement annuity?

4: how much would Starbucks have to deposit annually during the accumulation period if it could and 10% rather than 9% during accumulation period?

5: how much would Starbucks have to deposit annually during the accumulation period if MsMoran'sretirement annuity was a perpetuity and all other terms for the same as initially described