Question
13. A young couple just had their first baby and they wish to insure that enough money will be available to pay for her college
13. A young couple just had their first baby and they wish to insure that enough money will be available to pay for her college education. They decide to make deposits into an educational savings account on each of their daughters birthdays, starting with her first birthday in one year (year 1). The educational savings account pays an interest rate of 9.0%. The parents deposit $2,100 on their daughters first birthday and plan to increase the size of their deposits by 8.0% each year. Assuming that the parents have already made the deposit for their daughters 18th birthday (year 18), then the amount available for college expenses on her 18th birthday is:
(a) $151,431.19 (b) $86,732.81 (c) $32,102.46 (d) $145,990.78
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