What return is this investment offering

Assignment Help Financial Management

Reference no: EM131444257

1. A financial planning service offers a college savings program. The plan calls for you to make eight annual payments of $5,000 each, with the first payment occurring today, your child's 10th birthday. Beginning on your child's 18th birthday, the plan will provide $18,000 per year for four years. What return is this investment offering?

a) 9.96%

b) 12.11%

c) 14.38%

d) 16.69%

e) 18.12%

2. You are going to withdraw $1,000 at the end of each year for the next three years from an account that pays interest at a rate of 8% compounded annually. How much must there be in the account today in order for the account to reduce to a balance of zero after the last withdrawal?

a) $ 793.83

b) $2,577.10

c) $2,602.29

d) $2,713.75

e) $2,775.67

Reference no: EM131444257

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