Question

Problem 15-4 (LG 15-2) You deposit $13,000 annually into a life insurance fund for the next 10 years, after which time you plan to retire. a. If the deposits are made at the beginning of the year and earn an interest rate of 8 percent, what will be the amount in the retirement fund at the end of year 10? b. Instead of a lump sum, you wish to receive annuities for the next 20 years (years 11 through 30). What is the constant annual payment you expect to receive at the beginning of each year if you assume an interest rate of 8 percent during the distribution period? c. Repeat parts (a) and (b) above assuming earning rates of 7 percent and 9 percent during the deposit period and earning rates of 7 percent and 9 percent during the distribution period. Complete this question by entering your answers in the tabs below. Req A and B Reqc Repeat parts (a) and (b) above assuming earning rates of 7 percent and 9 percent during the deposit period and earning rates of 7 percent and 9 percent during the distribution period. (Do not round intermediate calculations. Round your answers to 2 decimal places. (e.g., 32.16)) Value at 10 Years Annual payment Deposit Period 7 percent Distribution Period 7 percent 9 percent 7 percent 9 percent 9 percent < Req A and B Reqc

Answer 1

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PV, FV, ANNUITY (Autosaved) - Microsoft Excel (Product Activation Failed) Review View Add-Ins File Home Insert Page Layout Formulas Data - 2x % Cut 11 A A = = = V Wrap Text General D A E Merge & Center - $ % & ... Cell Styles Insert Delete Format Calibri E Copy Paste Format Painter BIU Clipboard BV269 2 BQ BR Conditional Format Formatting as Table Styles Σ AutoSum : A Fill Sort & Find & 2 Clear Filter Select Editing Font Alignment Number Cells for BS BT BU B V BW BX BY BZ CA CB 5 269 CASE OF ANNUITY DUE PMT YEARS 13000 10 8.00% RATE 203391.34 (=FV(BV274,BV273,-BV272,,1)] 270 271 272 273 274 275 276 277 278 279 280 281 282 283 FUTURE VALUE RETIREMENT SAVINGS THIS AMOUNT SHOULD BE AVAILABLE ON RETIREMENT 203391.34 20 PRESENT VALUE YEARS RATE ANNUAL PAYMENT 284 8.00% 19181.35 (=PMT(BV283,BV282,-BV281,1)] 13000 285 286 287 288 289 PMT DEPOSIT PERIOD DISTRIBUTION PERIOD 10 CAP STRU VALUE profit margin loan with points LOCK BOX DILUTION DOLLAR COST AVG EXPO NPER APR CPI ear FVA pva s2 pv, fv, annuity ferences 53 STATE 56 57 BOI 120% | Red 1 + D O 9 * 4 ENG 30-11-2019

- 2x CB 5 PV, FV, ANNUITY (Autosaved) - Microsoft Excel (Product Activation Failed) File Home Insert Page Layout Formulas Data Review View Add-Ins % Cut Σ AutoSum : A Calibri 11AA = = = Dr Wrap Text General E Copy Fill Paste BIU D A E Merge & Center - $ % & ... Conditional Format Cell Format Painter Insert Delete Format Sort & Find & Formatting as Table Styles 2 Clear Filter Select Clipboard Font Alignment Number Styles Cells Editing BT299 - for BQ BR BS BT BU BV BW Bx BY BZ CA 285 286 PMT 13000 287 DEPOSIT PERIOD 288 DISTRIBUTION PERIOD 20 289 290 DEPOSIT PERIOD VALUE AT 10 YEARS DISTRIBUTION PERIOD ANNUAL PAYMENT 291 7% 192186.79 7% 16954.27 (=PMT(BV291,BV288,-BU291,,1)] 292 [=FV(BS291,BV287,-BV286,,1)] 9% 19315.03 [=PMT(BV292,BV288,-BU291,,1)] 10 293 9% 7% 215283.81 (=FV(BS294,BV287,-BV286,,1)] 18991.84 (=PMT(BV294,BV288,-BU294,1)] 21636.31 (=PMT(BV295,BV288,-BU294,,1)] 9% 294 295 296 297 298 299 300 301 302 303 304 305 CAP STRU VALUE profit margin loan with points LOCK BOX DILUTION DOLLAR COST AVG EXPO NPER APR CPI ear FVA pva s2 pv, fv, annuity ferences 53 STATE 56 57 BOI 120% | Rea 1 + DEF OENG 20-11-2019