On the day of his son's birth, a father decided to establish a fund for the boy's college education. The father wants the son to be able to withdraw $4000 from the fund on his 18th birthday, again on his 19th birthday, again on his 20th birthday, and again on his 21st birthday. If the fund earns interest at 9% per year, compounded quarterly, how much should the father deposit at the end of each year, up through the 17th year? include a non-excel cashflo

Q: Kara Delaney received a $6,000 gift for graduation from a relative. If she deposits the entire…

A: Present Value = pv = $6000Interest Rate = r = 2%Time = t = 10

Q: eives a ​$8,000 gift toward a college education from her grandparents. How much will the ​$8,000 be…

A: Future value is value of the principal amount of $ 8000  after 18years at 5.6% compounded quaterly.…

Q: Mike wants to donate $5,000,000 to establish a fund to provide an annual scholarship in perpetuity.…

A:

Q: None

A: Here's a detailed calculation for better understanding. For Grace's Savings Plan: Grace deposits…

Q: Mia will retire 10 years from now and wants to establish a fund today that will pay $48,000 cash at…

A: Deposited amount refers to the amount which is kept aside for investing in a fund for receiving the…

Q: how much will John have in his retirement account at age 60?

A: Present age is 25 Rate of return = 8% Retirement age = 60

Q: Melissa agrees to contribute $500 to the alumni fund at the end of each year for the next 9 years.…

A: Present value refers to the function of time, the value of money that is used for the computation of…

Q: You annually invest $1,500 in an individual retirement account (IRA) starting at the age of 25 and…

A: Your annual investment, PMT = $ 1,500    Starting age = 25Number of Years, n = 15Annual Interest…

Q: Alice needs P 4,000 per year for four years to go to college. Her father invested P 5,000 in 7%…

A: Future value of an amount is calculated as: = Amount * (1+rate)^number of periods

Q: On a child's first birthday, a parent wishes to deposit enough money so that the child can withdraw…

A: Present Value of annuity = Annual payments * PVAF(rate, number of years) Present Value = Future…

Q: New parents wish to save for their newborn's education and wish to have $35,000 at the end of 16…

A: Future value of annuity is the future value of the same cash flows that takes place at the end of…

Q: Brenda Young desires to have $16,500 eight years from now for her daughter’s college fund. If she…

A: Data given: FV= $16500 n=8 years r=12% (compounded annually) Required: what amount should she…

Q: Melissa agrees to contribute $500 to the alumni fund at the end of each year for the next 7 years.…

A:

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

A: The concept of time value of money will be used here. Money invested in an account grows due to the…

Q: Since the birth of his granddaughter, 20 years ago, Jason has deposited $200 at the beginning of…

A: 1. FVA after 7 years   = P * (([1 + I]^N - 1 )*(1+I))/I, where P is the payment amount= 200 I is…

Q: Mia will retire 10 years from now and wants to establish a fund today that will pay $30,000 cash at…

A: We will first calculate the value of the annuity at January 1, year 11 and then discount it for a…

Q: Starting six months after her grandson​ Robin's birth, Mrs. Devine made deposits of ​$230 into a…

A: Compounded semi-annually Interest earned above the interest already incurred is known as compound…

Q: Carl is the beneficiary of a $28,000 trust fund set up for him by his grandparents. Under the terms…

A: Annuity = Present Value / PVA of $1

Tax Deferred Retirement Benefits

It stands for Simplified Employee Pension Individual Retirement Account. This savings plan is for self-employed persons such as independent contractors, freelancers, entrepreneurs, etc. The tax rules of SEP IRA are the same as traditional IRA. Entrepreneurs can also open SEP IRA accounts for their employees and gain a tax advantage. The employees cannot make contributions to these accounts by themselves however they will be taxed upon withdrawal.