(Answered) 1 in the previous problem assume that the parents stop

Economics

1. In the previous problem, assume that the parents stop their contribution after 15 years. Use the modified version of Eq. (12.31), labeled (12.31MOD), and determine the amount they can withdraw annually such that after 4 years the fund would be exhausted.

2. A self-employed individual contributes $5,000 annually for 30 years into an Individual Retirement Account (IRA). At the end of 30 years the account balance is $230,000. Assuming monthly compounding, determine the interest rate that the IRA paid out.

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