Starting
three months
after her grandson Robin's birth, Mrs. Devine made deposits of
$95
into a trust fund every
three months
until Robin was
twenty-one
years old. The trust fund provides for equal withdrawals at the end of each
quarter
for
two
years, beginning
three months
after the last deposit. If interest is
5.49 %
compounded
quarterly,
how much will Robin receive every
three months ?
Answer:
Since initial investment is 3 months after birth till attaining the age of 21 years, balance available is the Future Value (FV) of annuity for 21*4= 84 quarters. The FV at the age of 21 is $14,830.59 as shown below:
Amount that Robin will receive for two years, beginning 3 months after last deposit is $1,970.14 as shown below:
Starting three months after her grandson Robin's birth, Mrs. Devine made deposits of $95 into a...
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