Grandparents plan to open an account on their grandchild's birthday and contribute each month until she goes to college. How much must they contribute at the beginning of each month in an investment that pays 7%, compounded monthly, if they want the balance to be $170,000 at the end of 18 years? (a) State whether the problem relates to an ordinary annuity or an annuity due.     (b) Solve the problem. (Round your answer to the nearest cent.)

Q: Ethan wants to set up a fund for his son's education such that he could withdraw $2,982.00 at the…

A: Quarterly withdrawals (P) = $2,982.00 Period = 6 Years Quarterly period (n) = 6*4 = 24 Interest rate…

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Q: Aylene is preparing for an income fund for her retirement. She wants to receive 15,000 pesos…

A: The present value is the value of the sum received at time 0. It is the current value of the sum…

Q: Grandparents plan to open an account on their grandchild's birthday and contribute each month until…

A: a) Answer: Annuity due. Annuities are regular periodic payments made over a specified period. When…

Q: A couple plans to save for their child's college education. What principal must be deposited by the…

A: Present value can be defined as the amount which is to be set aside in order to have a pre-defined…

Q: A couple plans to save for their child's college education. What principal must be deposited by the…

A: Given information: Total amount after 18 years is $43,000 Interest rate is 8% compounded quarterly,…

Q: Goran plans to set aside money for his young daughter’s college tuition. He will deposit money in an…

A: Given: Future value of annuity = $71,000 Interest = 2.4%

Q: A newborn child receives a $7,000 gift toward a college education from her grandparents. How much…

A: Inerest rate (decimal form) = Interest rate100=5%100=0.05   Quarterly interest rate (decimal form)…

Q: To help out with her retirement savings, Kaitlin invests in an ordinary annuity that earns 2.4%…

A: We will apply the required formula to calculate the quarterly payment, we will take the future value…

Q: A​ woman, with her​ employer's matching​ program, contribute ​$700 at the end of each month to her…

A: Monthly withdrawal refers to the amount that is withdrawn from the bank on the respective date of…

Q: To save money for his daughter's college tuition, Josh invests $279 every quarter in an annuity that…

A: Annuity means number of payments, which are equal in size and made at equal interval of time for a…

Q: A couple plans to pay their child's college tuition for 4 years starting 18 years from now. The…

A:

Q: Willie deposits a fixed monthly amount into an annuity account for his child's college fund. He…

A: Future value of annuity = P * [ (1+r)^n  - 1 ] /r  Where, Future value of annuity = $75000 P =…

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A: a)  Computation of my account balance:

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A: Given: Monthly withdrawal = $3,420 Interest rate = 6.9% So, monthly interest rate = 0.069/12 = 0.58%…

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A: Annuity: Annuity is a fixed amount of periodic payments. Annuity is a method to procure a stream of…

Q: You estimate you need to supplement your social security payments with monthly withdrawals of…

A: The question is based on the concept present value of annuity payment Formula as, Pv=pmt*1-(1+r)-nr

Q: Manuel plans to set aside money for his young daughter’s college tuition. He will deposit money in…

A: Annuity is referred as the instalment paid at the regular interval for a particular period. The…

Q: Frank plans to set aside money for his young daughter's college tuition. He will deposit money in an…

A: The Future Value of the Annuity refers to the sum value of all the payments which is occurred…

Q: You annually invest $2,000 in an individual retirement account (IRA) starting at the age of 30 and…

A: Since, in this question fixed amount is invested each year. So, it is the question of annuity.…

Q: (a) State whether the problem relates to an ordinary annuity or an annuity due. ordinary annuity…

A: Time value of money (TVM) is used to measure the value of money at different point of time in the…

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A: Interest, i=7%=0.07 p.a. Future value, S Ordinary annuity for 6 years, n=6 yearly payment, R =…

Q: To fund their child's college expenses, a family plans to invest $540 to a bank account at the end…

A: This is in the form of a growing annuity where the initial amount is 540 G = 12% (growth rate) and r…

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A: Given Information: Amount required for college fund = $50,000 Annual Interest rate = 8% Duration of…

Q: A couple plans to save for their child's college education. What principal must be deposited by the…

A: Here, we need to calculate the present value which needs to be deposited or kept aside by the couple…

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A: Ordinary Annuity: These are payments made at the period end regularly for a period of time. The size…

Q: At the time of her grandson's birth, a grandmother deposits $12,000 in an account that pays 3.5%…

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Q: Salem wishes to withdraw AED 30,000 at the end of each year of the next 6 years from his bank…

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Q: You annually invest $1,500 in an individual retirement account (IRA) starting at the age of 30 and…

A:

Q: New parents wish to save for their newborn's education and wish to have $47,000 at the end of 19…

A: Given: Future value = $47,000 Years = 19 Interest rate = 4.3%

Q: how much do they need to invest at the end of each 6-month period for the next 18 years to begin…

A: The present value of an annuity: A=R[(1-(1+i)-n)i] A=35,000[(1-(1+0.03)-16)0.03] A = 439,639

Q: A grandfather agrees to start contributing $2,500.00 to an educational savings account starting with…

A: Future value is the expected value of present sum at a future date, at a given rate of interest.…

Q: Assume the money earns 7% interest, compounded quarterly

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Q: To help pay for an estimated $35000 in college expenses, parents make a deposit into a college fund…

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Q: What principal must be deposited

A: Compound interest is the amount of interest that is added with the principal amount of deposit or…

Q: A woman, with her employer's matching program, contributes $500 at the end of each month to her…

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Q: A couple plans to save their child's college education. What principal must be deposited by the…

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Q: A family wants to have a $220,000 college fund for their children at the end of 16 years. What…

A: The series of regular payment at the end of each specified intervals is known as ordinary annuity.…

Q: How much money will be in the account when the child turns 18?

A: Time value of money(TVM) means that the money received in the present days will have more value…

Q: Frank plans to set aside money for his young daughter's college tuition. He will deposit money in an…

A: This is a case of ordinary annuity. It means that deposits are being made at the end of the relevant…

Amortized Loans

The term "amortization" refers to spreading the value of a loan or a debt over a series of regular payments or installments comprising of both the principal and interest amount. It generally involves the process where in the value of a loan or an intangible asset is written down over its maturity period.