3. This question is about annuities. a) Each year for the first 18 years of their...

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3. This question is about annuities. a) Each year for the first 18 years of their life a child's parents deposit a set amount into a bank account. The child will require $15 000 per year for 4 years to pay for university starting on their 19th birthday. Assuming an annual interest rate of 11% how much do the parents need to deposit each year to accomplush this? b) Steve wishes to buy deferred annuity. He desire the annuity to pay $1,400 per month for 20 years starting 1 month after he turns 65. How much will this annuity cost Steve today if it is his 35th birthday today? Assume that i(12) = 7.8% or the annual rate is 7.8% compounded monthly. c) A boat costs $27,000. Rick is planning to deposit $28 per week for 4 years (208 deposits) starting today into an account with i(52) = 3.9% or an annual interest rate of 3.9% compounded weekly. He will then wait while the money accrues interest until he has enough money to buy the boat. When will Rick be able to buy his boat? (assume 52 wks/yr) 3. This question is about annuities. a) Each year for the first 18 years of their life a child's parents deposit a set amount into a bank account. The child will require $15 000 per year for 4 years to pay for university starting on their 19th birthday. Assuming an annual interest rate of 11% how much do the parents need to deposit each year to accomplush this? b) Steve wishes to buy deferred annuity. He desire the annuity to pay $1,400 per month for 20 years starting 1 month after he turns 65. How much will this annuity cost Steve today if it is his 35th birthday today? Assume that i(12) = 7.8% or the annual rate is 7.8% compounded monthly. c) A boat costs $27,000. Rick is planning to deposit $28 per week for 4 years (208 deposits) starting today into an account with i(52) = 3.9% or an annual interest rate of 3.9% compounded weekly. He will then wait while the money accrues interest until he has enough money to buy the boat. When will Rick be able to buy his boat? (assume 52 wks/yr)

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a To calculate how much the parents need to deposit each year for the first 18 years of the childs life in order to pay for university starting on the... View the full answer