Grandparents want to contribute to their two grandchildren's education. When Grandchild 1 is born, they begin...

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Grandparents want to contribute to their two grandchildren's education. When Grandchild 1 is born, they begin depositing (4)($500) at the end of each year. At year 4, Grandchild 2 is born, and at the end of year 4, their deposit increases to (4) ($1000) and remains at that amount each year until, and including, year 25. X dollars is withdrawn at the end of years 17-19, and the withdrawal becomes 2x dollars in years 20-22, but returns to X dollars in years 23-25, leaving the account empty. At 4% interest, what is x? Grandparents want to contribute to their two grandchildren's education. When Grandchild 1 is born, they begin depositing (4)($500) at the end of each year. At year 4, Grandchild 2 is born, and at the end of year 4, their deposit increases to (4) ($1000) and remains at that amount each year until, and including, year 25. X dollars is withdrawn at the end of years 17-19, and the withdrawal becomes 2x dollars in years 20-22, but returns to X dollars in years 23-25, leaving the account empty. At 4% interest, what is x?

Answer rating: 100% (QA)

To solve this problem we need to first calculate the future value of the contributions made by the grandparents over the 25year period We can use the formula for future value of an annuity FV PMT 1 rn ... View the full answer