Your son has been accepted into college. This college guarantees that your sons tuition will not increase
Question:
Your son has been accepted into college. This college guarantees that your son’s tuition will not increase for the four years he attends college. The first $8500 tuition payment is due in six months. After that, the same payment is due every six months until you have made a total of eight payments. The college offers a bank account that allows you to withdraw money every six months and has a fixed APR of 8% (semiannual) guaranteed to remain the same over the next four years. How much money must you deposit today if you intend to make no further deposits and would like to make all the tuition payments from this account, leaving the account empty when the last payment is made?
Step by Step Answer:
Corporate Finance The Core
ISBN: 9781292158334
4th Global Edition
Authors: Jonathan Berk, Peter DeMarzo