Create schedule showing cash inflows-outflows of this fund

Assignment Help Financial Management

Reference no: EM13847204

Craig and LaDonna Allen are trying to establish a college fund for their son Spencer, who just turned three today. They plan for Spencer to withdraw $10000 on his eighteenth birthday and $11000, $12000, and $15000 on his subsequent birthdays. They plan to fund these withdrawls with a ten year annuity, with the first payment to occur one year from today, and expect to earn an average annual return pf 8 percent.

a. how much will the Allens have to contribute each year to achieve their goal?

b. Create a schedule showing the cash inflows (including interest) and outflows of this fund. How much remains on Spencer's twenty-first birthday?

Reference no: EM13847204

Questions Cloud

Write a summary and analysis of the article : Locate an article of your choice that is about a current issue in juvenile justice. Write a summary and analysis of the article, and make sure to cite the article in APA format and include a link

How to maximize tax collection : How many units of each type should be constructed to maximize tax collection and Use Simplex method to solve the given problems.

How the internet has helped forensics and criminalistics : The Internet has helped many different professionals. Write a 2 to 3 page essay on how the Internet has helped forensics/ criminalistics

Does the infinite series of cash flow : An infinite series of cash flow pays $10 one year from today. After that the annual cash payment increases 5% per year forever. Does the infinite series of cash flow have a finite value today?

Create schedule showing cash inflows-outflows of this fund : Craig and LaDonna Allen are trying to establish a college fund for their son Spencer, who just turned three today. They plan for Spencer to withdraw $10000 on his eighteenth birthday and $11000, $12000, and $15000 on his subsequent birthdays. Create ..

Find the accumulated value of this annuity : An annuity pays 10,000 every year for 30 years. Find the accumulated value of this annuity 3 years after the last payment. Assume that the effective annual interest rate is 10%. An annuity pays 5,000 every year for 25 years. Find the present value of..

New equipment and dedicated production facility : At the end of the last HW assignment, Mr.Speakers had been organized into a corporation and had continued making and selling a small number of headphones. In order to expand production capabilities, Mollena has decided that Mr.Speakers needs new equi..

What is bond indenture-what are some of important features : How do you find the value of a bond, and why do bond prices change? What is a bond indenture, and what are some of the important features? What are bond ratings, and why are they important? How does inflation affect interest rates?

Should you purchase the delivery truck or lease : Your firm needs to invest in a new delivery truck. The life expectancy of the delivery truck is five years. You can purchase a new delivery truck for an upfront cost of $200,000, or you can lease a truck from the manufacturer for five years for a mon..

User Account

All Pages