Question

Yumi's grandparents presented her with a gift of $11,000 when she was 8 years old to be used for her college education. Over the next 9 years, until she turned 17, Yumi's parents had invested her money in a tax-free account that had yielded interest at the rate of 5.5%/year compounded monthly. Upon turning 17, Yumi now plans to withdraw her funds in equal annual installments over the next 4 years, starting at age 18. If the college fund is expected to earn interest at the rate of 7%/year, compounded annually, what will be the size of each installment?

Answer 1

when Yumi turned 17, the fund was worth

11000(1+.055/12)^(12*9) = 18025.08

Now, plug that into your annuity formula, to get annual payments of

M = Pr/(1-(1+r)^(-n))
= 18025.08(1-(1.07)^-4)
= 4273.83

Answer 2

234+323
34243
+2
=69

Answer 3

finite math suxssssss