Your friend Ellen is celebrating her

24thbirthday (i.e., she is24

today) and wants to start saving for her anticipated retirement at age 55. She wants to be able to withdraw

$9000

from her savings account on each birthday for 10 years following her retirement (the first withdrawal will be on her 56th birthday). Ellen intends to invest her money in the local saving bank, which offers

9%

(EAR) interest per year.

a. Suppose Ellen won a lottery today and decided to make one lump sum payment today to cover her retirement needs (no other deposit will be made). What amount would she have to deposit today? (7 points)

Ellen would have to deposit

$nothingtoday.

(Round to the nearest cent.)b. Suppose Ellen wants to make 24 deposits with the same amount C to cover her retirement needs. She plans to start making these deposits on her

25th

birthday and continues to make deposits on every birthday until she is

49

(the last deposit will be on her

49th

birthday). The only exception is she will skip the deposits on her 40th birthday as she will spend the money to travel in Europe. What is the minimal amount of C will Ellen have to deposit? (7points)The minimal amount of C Ellen will have to deposit is

$nothing

per

year.

(Round to the nearest cent.)

Your friend Ellen is celebrating her 24th birthday (i.e., she is 24 today) and wants to start saving for her anticipated retirement at age 55. She wants to be able to withdraw $9000 from her savings account on each birthday for 10 years following her retirement (the first withdrawal will be on her 56th birthday). Ellen intends to invest her money in the local saving bank, which offers 9% (EAR) interest per year. a. Suppose Ellen won a lottery today and decided to make one lump sum payment today to cover her retirement needs (no other deposit will be made). What amount would she have to deposit today? (7 points) Ellen would have to deposit $ today. (Round to the nearest cent.) b. Suppose Ellen wants to make 24 deposits with the same amount C to cover her retirement needs. She plans to start making these deposits on her 25th birthday and continues to make deposits on every birthday until she is 49 (the last deposit will be on her 49th birthday). The only exception is she will skip the deposits on her 40th birthday as she will spend the money to travel in Europe. What is the minimal amount of C will Ellen have to deposit? (7 points) The minimal amount of C Ellen will have to deposit is $ per year. (Round to the nearest cent.) Your friend Ellen is celebrating her 24th birthday (i.e., she is 24 today) and wants to start saving for her anticipated retirement at age 55. She wants to be able to withdraw $9000 from her savings account on each birthday for 10 years following her retirement (the first withdrawal will be on her 56th birthday). Ellen intends to invest her money in the local saving bank, which offers 9% (EAR) interest per year. a. Suppose Ellen won a lottery today and decided to make one lump sum payment today to cover her retirement needs (no other deposit will be made). What amount would she have to deposit today? (7 points) Ellen would have to deposit $ today. (Round to the nearest cent.) b. Suppose Ellen wants to make 24 deposits with the same amount C to cover her retirement needs. She plans to start making these deposits on her 25th birthday and continues to make deposits on every birthday until she is 49 (the last deposit will be on her 49th birthday). The only exception is she will skip the deposits on her 40th birthday as she will spend the money to travel in Europe. What is the minimal amount of C will Ellen have to deposit? (7 points) The minimal amount of C Ellen will have to deposit is $ per year. (Round to the nearest cent.)