Joe and Sarah Fabozzi are saving for the college education of their newborn daughter (born today), Beth.  The Fabozzi's estimate that college expenses will run $30,000 per year when their daughter reaches college in 18 years. In other words, the first withdrawal will be made on Beth's 18th Birthday, and the last payment will be made on Beth's 17th Birthday.   The expected interest rate while saving and in college is 6%.   The first deposit will be made one year from today.  Calculate the annual payment the Fabozzi's must make to the account so that their daughter will be completely supported through four years of college.

Answer rating: 100% (QA)

Answer To solve this problem we need to use the concept of the present value of an annuity Given inf... View the full answer