Solving questions 1-3.

aer weekend Finance 440 TVM Exercise 6 Draw the time line for this problem. Write out the formulation for each part so I know that you know what you are supposed to be doing, in case your numbers come out wrong. Clearly identify what you have and what you need to solve for and show all of your work. Round your answers to the nearest dollar. You have just turned 30 and want to get your finances in order. You still have $32, 243 of student loans outstanding, and do not want to commit to a mortgage until that is paid off. You just got a pretty good job that you like but it does not offer a retirement plan. You also have a two year old child, 1. (15 points) You now have access to a trust fund that was set up by your grandfather's will when he died 10 years ago. The initial investment in that fund was $27,108. It has been earning a very conservative average of 4 % a year. Your plan is to use the current trust balance to pay off the student loan balance first. How much will be left in the trust fund after paying off the loans? 2. (15 points) You decide to put the remainder in an account that should earn 6 % for your child's college fund. How much will be in that account when she turns 18? 3. You plan to retire 35 years from now. You expect that you will live 27 years after retiring. You want to have enough money upon reaching retirement age to withdraw $40,000 from the account at the beginning of each year you expect to live, and yet still have $500,000 left in the account at the time of your expected death. You plan to deposit $500 per month in a high risk, high return fund that claims to be able to earn 12 % for the next ten years. After that, you will set up a much more conservative fund that you expect will earn 6 %. a. (30 points) How much will you need in your retirement fund 35 years from now to meet your retirement goals? (20 points) How much will be in your high risk account at the end of 10 years if you actually b. earn an average of 12 % per year on that money? c. (20 points) If you move the balance from the 12 % account into the 6 % account at the beginning of year 11, how much more will you have to add to that account every month to achieve your retirement plans