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adms_3530_assignment_1_fall_2012_solution

84 7006774 4302398 page8of18 difference in amount

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Unformatted text preview: ute future value at the end of Year 5 PMT = 5000 PV = 0 5000 r = 4% = 0.04 . . n=5 FV?? 27081.6128At the start of Year 8, 27081.6128 1.04 29291.47 They will give Alpha $29291.47 at the start of her post-secondary education. Page 10 of 18 #4c) PMT = 5000 PV = 0 1 r = 4% = 0.04 1 5000 n=5 1.04 1 0.04 FV?? 27081.6128 They will give Beta $227081.61 at the start of his post-secondary education. #4d) Focal date: 20 years from now Savings: Future Value of the $10,000 in savings now: 10,000 1.04 1 21911.23 Value of the $15,000 that went into retirement savings during years 6-10 at the end of year 10: 1 1 15,000 1.04 1 0.04 81244.84 10 years later this value becomes 81244.84 1.04 120,262.21 Value of the $20,000 that went into retirement savings during years 11-20: 1 1 2...
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