REQUIRED ANNUITY PAYMENTS A father is now planning a savings program to put his daughter through...

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REQUIRED ANNUITY PAYMENTS A father is now planning a savings program to put his daughter through college. She is 13, she plans to enroll at the university in 5 years, and she should graduate in 4 years. Currently, the annual cost (for everything—food, clothing, tuition, books, transportation, and so forth) is $15,000, but these costs are expected to increase by 5% annually. The college requires that this amount be paid at the start of the year. She now has $7,500 in a college savings account that pays 6% annually. Her father will make six equal annual deposits into her account
the first deposit today and the sixth on the day she starts college. How large must each of the six payments be? Oct 06 2014 10:28 AM

 

Solution ID:608854 | This paper was updated on 26-Nov-2015

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