Question: A father is now planning a savings program to put his daughter through college. She is 13, plans to enroll at the university in 5
A father is now planning a savings program to put his daughter through college. She is 13, plans to enroll at the university in 5 years, and should graduate 4 years later. 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 total payment 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?
Step by Step Solution
3.53 Rating (156 Votes )
There are 3 Steps involved in it
Step 1 Determine the annual cost of college The current cost is 15000 per year but that is escalatin... View full answer
Get step-by-step solutions from verified subject matter experts
Document Format (1 attachment)
1097-B-F-F-M(8275).docx
120 KBs Word File
