Arlene and Mario Dumont want to set up a fund to finance their daughter’s university education. They want to be able to withdraw $400 from the fund at the beginning of each month for four years. Their daughter enters university in seven- and-a-half years and interest is 6% compounded monthly.
(a) How much must the Dumonts deposit in the fund today?
(b) What will be the amount of the total withdrawals?
(c) How much of the amount withdrawn will be interest?