Withdrawals will they be able to make before account balance

Assignment Help Financial Management

Reference no: EM131613848

A young couple wants to have a college fund that will pay $40,000 at the end of each half-year for 8 years.

(a) If they can invest at 6%, compounded semiannually, how much do they need to invest at the end of each 6-month period for the next 18 years in order to begin making their college withdrawals 6 months after their last investment? (Round your answer to the nearest cent.)

(b) Suppose 8 years after beginning the annuity payments, they receive an inheritance of $31,000 that they contribute to the account, and they continue to make their regular payments as found in part (a). How many college withdrawals will they be able to make before the account balance is $0? (Round your answer to the nearest whole number.)

withdrawals

Reference no: EM131613848

Questions Cloud

What was the spot rate at which the pesos were converted : what was the spot rate at which the pesos were converted?

Discuss given vector statement into components : The vector in 2-space of length 2 pointing up and to the right at an angle of p/4 with the x-axis.

What extent the pro-con argument based upon facts or values : what extent the pro-con argument about capital punishment based upon facts or values? Briefly discuss capital punishment from both a deontological

Industries operated as monopolist for the past several years : Smyth Industries operated as a monopolist for the past several years, earning annual profits amounting to $58 million,

Withdrawals will they be able to make before account balance : How many college withdrawals will they be able to make before the account balance is $0?

What is the difference between a dnp and a phd in nursing : Which of these would you choose to pursue if you decide to continue your education to the doctoral level?

Critical infrastructure risks and vulnerabilities : Critical Infrastructure Risks and Vulnerabilities, Describe the tools and techniques used to protect against a global attack on SCADA

The patient care delivery model in inpatient facilities : Discuss how the CMS reimbursement rules for never events required a shift in the patient care delivery model in inpatient facilities.

Money must be removed from the estate to purchase annuity : how much money must be removed from the estate to purchase the annuity?

User Account

All Pages