Robert and Sarah just had a baby. They want to begin planning for their child's college...

 

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Robert and Sarah just had a baby. They want to begin planning for their child's college education. In 18 years, they wish to have accumulated enough money to pay tuition costs of $100,000 per year for four years. That is, Robert and Sarah want to accumulate enough money to receive an annuity of $100,000 for four years 18 years from now. During the next 18 years, Robert and Sarah can earn 6 percent annually, while after 18 years they can earn 10% annually. What annual contributions to the education fund will allow Robert and Sarah to receive the $100,000 annuity? Robert and Sarah just had a baby. They want to begin planning for their child's college education. In 18 years, they wish to have accumulated enough money to pay tuition costs of $100,000 per year for four years. That is, Robert and Sarah want to accumulate enough money to receive an annuity of $100,000 for four years 18 years from now. During the next 18 years, Robert and Sarah can earn 6 percent annually, while after 18 years they can earn 10% annually. What annual contributions to the education fund will allow Robert and Sarah to receive the $100,000 annuity?

Answer rating: 100% (QA)

The annual contributions that Robert and Sarah need to make are 2762508385 Here are the steps on how ... View the full answer