References Mailings Review View Help Acrobat ntain viruses. Unless you need to edit it's safer to stay in Protected View Enable Editing 1. You want to have $500,000 when you retire in 30 years. You determine that you can earn 4% per year, compounded quarterly, on an investment account. How much do you have to invest equal amounts every quarter, starting at the end of this quarter, in order to reach your goal? Why is this amount less than the annual PMT (from FVA #2) divided by 4? 2. You plan to have $500,000 when you retire in 30 years, and live for 20 more years after that, leaving nothing in the account for your ungrateful children. You determine that you can earn 4% per year, compounded quarterly, on an investment account. How much will you be able to withdraw at the end of every quarter after retirement? Why is this amountless than the annual PMT (from PVA #2) divided by 4? 3. If you can earn 4% per year, compounded quarterly, what is your Effective Annual Rate? What, in words, does EAR mean? 4. Suppose you can earn 6% per year, (compounded annually), forever. You want to invest an amount that will pay all your future heirs $100,000 per year (also forever). a. How much would you have to invest today? b. Suppose you wouldn't start paying out the perpetuity until the end of the year you pass away (start paying 81 years from now). How much would you have to invest today? G