nicolejwliew
New member
- Joined
- Jul 12, 2016
- Messages
- 4
Sunshine Industries (Sunshine) wishes to accumulate funds to provide a retirement annuity for its vice president, Ms. Sofea. According to the contract, she will retire at the end of exactly 12 years. Upon retirement, she is entitled to receive an annual end-of-year payment of RM42,000 for exactly 20 years. If she dies prior to the end of the 20-year period, the annual payments will pass to her heirs. During the 12-year accumulation period, Sunshine wishes to fund the annuity by making equal annual end-of-year deposits into an account earning 9% interest. Once the 20-year distribution period begins, Sunshine plans to move the accumulated monies into an account earning a guaranteed 12% per year. At the end of the distribution period, the account balance will equal zero. Note that the first deposit will be made at the end of year 1 and that the first distribution payment will be received at the end of year 13.
1. How large must Sunshine’s make for equal annual end-of-year deposits into the account for the 12-year accumulation period to fund fully Ms. Sofea’s retirement annuity?
2.How much would Sunshine have to deposit annually during the accumulation period if it could earn 10% rather than 9% during the accumulation period?
can someone teach me how to do ???
1. How large must Sunshine’s make for equal annual end-of-year deposits into the account for the 12-year accumulation period to fund fully Ms. Sofea’s retirement annuity?
2.How much would Sunshine have to deposit annually during the accumulation period if it could earn 10% rather than 9% during the accumulation period?
can someone teach me how to do ???
