Your younger sister, Barbara, will start college in five years. She has just informed your parents that
Question:
Your younger sister, Barbara, will start college in five years. She has just informed your parents that she wants to go to Eastern University, which will cost $15,000 per year for four years (assumed to come at the end of each year). Anticipating Barbara's ambitions, your parents started investing $2,000 per year five years ago and will continue to do so for five more years. How much more will your parents have to invest each year for the next five years to have the necessary funds for Barbara's education? Use 10 percent as the appropriate interest rate throughout this problem (for discounting or compounding).
Step by Step Answer:
Foundations of Financial Management
ISBN: 978-1259024979
10th Canadian edition
Authors: Stanley Block, Geoffrey Hirt, Bartley Danielsen, Doug Short, Michael Perretta