Starting six months after her grandson Robin's birth, Mrs. Devine made deposits of $230 into a trust fund every six months until Robin was eighteen years old. The trust fund provides for equal withdrawals at the end of each six months for four years, beginning six months after the last deposit. If interest is 4.89% compounded semi-annually, how much will Robin receive every six months?

Starting six months after her grandson Robin's birth, Mrs. Devine made deposits of $230 into a trust fund every six months until Robin was eighteen years old. The trust fund provides for equal withdrawals at the end of each six months for four years, beginning six months after the last deposit. If interest is 4.89% compounded semi-annually, how much will Robin receive every six months?

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Carl is the beneficiary of a $28,000 trust fund set up for him by his grandparents. Under the terms of the trust, he is to receive the money over a 4-year period in equal installments at the end of each year. If the fund earns interest at the rate of 4%/year compounded annually, what amount will he receive each year? (Round your answer to the nearest cent.)
For 30 years, lilly contributed $180 every month to savings accountthat earns 1.6% interestcompounded monthly. After the 30 years, he stopped his regular contributions and let the account grow for the next 15 years. Determine the balance of the account at the end to the 45 years that he hadhis account.
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For the last 15 years Joseph has deposited $4500 at the end of every six months into an account paying 6.5% compounded semi-annually.He now converts the accumulated amount into a retirement income fund which will ear interest at 5.25% compounded monthly. Joseph plans to receive equal payments at the end of every six months from this fund for the next 10 year. Determine the size of each payment.
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Reese contributed $250.00 every month into an RRSP for 5 years. What nominal annual rate of interest will the RRSP earn if the balance in Reese's account just after she made her last contribution was $16,750.00? The nominal annual rate of interest is % compounded monthly. (Round to two decimal places as needed.) C
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When she was 6 years old, Jane’s parents set up an annuity for her college education, with the first payment deferred for 12 years until she reached the age of 18. The annuity, rated at 6%, compounded semi-annually, will pay $8,000 at the end of every 6 months for the 4 year period of her college education. a) Find the number of payment periods (N) Find the number of deferment periods (k) c) Find the Present Value of this annuity, i.e., what lump sum payment must Jane’s parents invest (at t = 0 ) to start the account [Find A(N,k)]
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Joel invested $1,025 at the end of every month into an investment fund that was earning interest at 4.75% compounded monthly. She stopped making regular deposits at the end of 9 years when the interest rate changed to 5.00% compounded quarterly. However, she let the money grow in this investment fund for the next 4 years. a. Calculate the accumulated balance in her investment fund at the end of 9 years. $0.00 Round to the nearest cent b. Calculate the accumulated balance in her investment fund at the end of 13 years. $0.00 Round to the nearest cent c. Calculate the amount of interest earned over the 13-year period. $0.00 Round to the nearest cent

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