Mercy wants to make sure that she will be able to provide for her daughter's college and plans to open a savings account with a bank that is ready to pay interest as shown below per year compounded yearly. She wants to begin saving on her 25th birthday till her 42nd birthday, and expects to keep increasing the amount by a percent shown each year. 

She would like to plan to make 5 payments for her daughter's college needs. Her first payment will be as shown below starting on Mercy's 43rd birthday. Mercy thinks that it is justified that she increase the amount that she lets her daughter have each year as shown. 

What is the amount that Mercy will have to deposit in the savings account on her 25th birthday?

 

Savings rate	2%	p y c y
Increase in deposits	4%	py
Withdraw on 43rd B'day	$18,000
Increase in $ to daughter	5%	py

Answer rating: 100% (QA)

To solve Mercys query we first need to understand how much she needs to save each year and how much her total savings will grow to be able to meet the ... View the full answer