5. A company is going to set up a perpetuity to withdraw $150 for miscellaneous expenses...

  

Transcribed Image Text:

5. A company is going to set up a perpetuity to withdraw $150 for miscellaneous expenses each quarter. If money can earn 1% compounded quarterly, how much do you need to have in the account if payments will be withdrawn starting today? 6. Your friend has an extra $1000 that they will deposit into their account today. That deposit will gain 4% com- pounded semi-annually for 10 years. Exactly 10 years after the deposit, they will be deposit $500 every 6 months for another 10 years (20 deposits) and will still gain 4% semi-annually. How much will be in the account 20 years after the initial deposit? 7. An acquaintance has asked you about retirement. They want to know what their monthly payments need to be for the next 25 years if they wish to get $1000 every month starting one month after the 25 years. They would like to receive this every month for 25 years. If it is estimated that money in the account will get 1% compounded monthly, how much will the monthly deposits need to be? (Hint: Calculate how much you will need by the time retirement comes, then calculate the payment based on this value. Each annuity will be marked out of 3.) 5. A company is going to set up a perpetuity to withdraw $150 for miscellaneous expenses each quarter. If money can earn 1% compounded quarterly, how much do you need to have in the account if payments will be withdrawn starting today? 6. Your friend has an extra $1000 that they will deposit into their account today. That deposit will gain 4% com- pounded semi-annually for 10 years. Exactly 10 years after the deposit, they will be deposit $500 every 6 months for another 10 years (20 deposits) and will still gain 4% semi-annually. How much will be in the account 20 years after the initial deposit? 7. An acquaintance has asked you about retirement. They want to know what their monthly payments need to be for the next 25 years if they wish to get $1000 every month starting one month after the 25 years. They would like to receive this every month for 25 years. If it is estimated that money in the account will get 1% compounded monthly, how much will the monthly deposits need to be? (Hint: Calculate how much you will need by the time retirement comes, then calculate the payment based on this value. Each annuity will be marked out of 3.)