A father wants to set up a bank account that will pay his daughter $18,000 at the end-of-quarter (EOQ4) and $32,000 at EOQ 8. He will fund this account by making quarterly payments of $X from the present (time zero) through EOQ 7.
a) Draw a cash-flow diagram from the father's viewpoint.
b) If the quarterly percentage rate is 2%, What is the value $X that must be deposited into the account?