Dear Tutor

I'd like to know the solution below Questions.

Please guide me if possible.

Thank you

q1. Bill Gates wants to set up a trust fund that would start making 30 annual payments to his son

Micro with the first payment 18 years from today. The first ten payments will be $50 million

a year, the second ten payments will be $100 million a year, and the last 10 payments will be

$200 million a year. How much would Bill Gates have to deposit today at 10% compounded

annually in order to fund these future trust fund payments?

q2. Frieda Finance, age 25, wants to do some retirement planning. Frieda plans on working for

40 more years, retiring at age 65, and then living 22 more years until 87. She wants to start

withdrawing a 22-year retirement annuity at age 65 with the first withdrawal at age 65. She

wants the annual annuity withdrawal at age 65 to have the equivalent purchasing power of

$50,000 today (age 25), and she is expecting a 3.5% inflation rate compounded annually

between now and retirement at age 65. Also, in addition to her retirement annuity, Frieda

wants to provide $250,000 at age 73 to help pay the college costs of any future grandchildren.

Frieda plans to fund this plans by making 40 equal annual deposits beginning today in an IRA

with an expected annual interest rate of 10% compounded annually; she also expects the

account to earn this same rate after retirement. Answer the following:

(a) What will be Frieda's annual annuity withdrawal?

(b) How much will Frieda need at age 65 to fund her retirement annuity and

grandchildren college fund gift?

(c) How large does Frieda annual savings deposit need to be?