A Father Wants to Provide an Annuity of $3350

question 72

Essay

A father wants to provide an annuity of $3350.00 payable at the end of each 6 months during the three years his son attends college. It will be six years before his son goes to college. What single deposit must he make today that will finance the annuity, if he can invest his money at 7.84% p.a. compounded semi-annually?

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Definitions:

Intense Fear

A strong, uncontrollable, and often irrational reaction to a specific object, situation, or event, leading to avoidance or distress.

Palpitations

The feeling of having a rapid, fluttering, or pounding heartbeat.

Sweating

A physiological process of secreting fluid from sweat glands of the skin, often induced by heat or stress as part of the body's cooling mechanism.

Physical Symptoms

Observable or felt changes in the body that often indicate disease, discomfort, or the effects of stress.