Use the appropriate table to compute the following: (Please indicate table used and show all your work) (15 pts.)

1. Your uncle is 70 years old. Over the years, he has accumulated savings of $300,000. He estimates that he will live another 10 years at the most and he wants to spend his savings by then. He places his $300,000 into an account earning 10% annually and sets it up in such a way that he will be making 10 equal annual withdrawals.

How much will he be able to withdraw each year?

2. Your mother is planning to retire this year. Her firm has offered her a lump-sum retirement plan of $120,000 or a $10,000 lifetime annuity, whichever she chooses. Your mother is in reasonable good health and expects to live for at least 20 more years. Which option should she choose, assuming that a 7% interest rate is appropriate to evaluate the annuity?

3. You just won $200,000 in the lottery. You have decided to invest this amount and to withdraw an equal amount each year for 5 years. How much can you withdraw each year if you invest the $200,000 at 10% compounded annually?

4. You want to spend $25,000 on a vacation at the end of each of the next 5 years. What lump sum do you have to invest now to take the 5 vacations, assuming that your minimum desired rate of return is 5% compounded annually.

5. If you desire to have $80,000 for a down payment for a house that you plan to buy in three years, what amount would you need to deposit today? Assume that your deposit will earn 8 percent.