James Streets son, Harold, is 10 years old today. Harold, a studious young fellow, is already making
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Street would like to make eight annual deposits (the first of which would be made on Harold’s 11th birthday, one year from now, and the last on his 18th birthday, the day he leaves for college) in an account earning 10 percent annually. He wants the account to eventually be worth enough to just pay for Harold’s college expenses. Any balances remaining in the account will continue to earn the 10 percent.
How much will Street have to deposit in this “planning” account each year to provide for Harold’s education?
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Contemporary Financial Management
ISBN: 9780324289114
10th Edition
Authors: James R Mcguigan, R Charles Moyer, William J Kretlow
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