To complete your degree and then go through graduate school, you will need $95,000 at the end
Question:
To complete your degree and then go through graduate school, you will need $95,000 at the end of each of the next 8 years. Your parents will deposit a sum of money sufficient to provide you with the needed 8 withdrawals of $95,000 each while your bank will be paying 4.00% annual interest.
a) How large of a deposit must she make today? (1 point)
b) How much will be in the account immediately after you make the 3rd withdrawal? (1 point)
c) How much will be in the account immediately after you make all the withdrawals including the last one in Year 8? (1 point)
d) Now, you have decided not to go to school. You will not make any of the either withdrawal, but instead keep your parents' money. How much will you have at the end of 8 years? (1 point)
Corporate Finance A Focused Approach
ISBN: 978-1439078082
4th Edition
Authors: Michael C. Ehrhardt, Eugene F. Brigham