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of the retirement annuity.
b. How large a sum must Sunrise accumulate by the end of year 12 to provide
the 20-year, $42,000 annuity?
c. How large must Sunrise’s equal annual end-of-year deposits into the account
be over the 12-year accumulation period to fund fully Ms. Moran’s retirement annuity?
d. How much would Sunrise have to deposit annually during the accumulation
period if it could earn 10% rather than 9% during the accumulation period?
e. How much would Sunrise have to deposit annually during the accumulation
period if Ms. Moran’s retirement annuity were a perpetuity and all other
terms were the same as initially described? WEB EXERCISE
W Go to Web site www.arachnoid.com/lutusp/finance_old.html. Page down to the
portion of this screen that contains the financial calculator.
1. To determine the FV of a fixed amount, enter the following:
Into PV, enter
enter 8. 1000; into np, enter 1; into pmt, enter 0; and, into ir, 188 PART 2 Important Financial Concepts Now click on Calculate FV, and 1080.00 should appear in the FV window.
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