Your objective is an annuity due paying $5,000 semi-annually
for 5½ years at 4% compounded quarterly. How far in advance of this
would you need to invest $20,000 at 6.82% compounded monthly?
Assume 30 days in a month.
Jeff and Sarah want an ordinary annuity to pay their daughter
$1,000 monthly for three years and nine months for the duration of
her educational studies starting August 1, 2024. What lump-sum
amount do they need to invest on August 1, 2014, if the deferred
annuity can earn 6.6% compounded monthly during the accumulation
stage and 4% compounded quarterly during the income payments
stage?