Question
9) The Williams need help planning for college finances for their two sons, Brandon and Mitt. They expect their second child, Brandon, to start college
9) The Williams need help planning for college finances for their two sons, Brandon and Mitt. They expect their second child, Brandon, to start college in 18 years. At that time, they would like to have enough money on hand to withdraw $11,500 per quarter to pay tuition at Babson College. Because college will last four years, they need to make a total of 16 quarterly withdrawals, with the first one made the day Brandon starts college. They plan on gathering the necessary funds by making quarterly deposits into an account which pays 6% APR, compounded quarterly. However, there is one complication. Mitt will start college at a different school in 8 years, MIT. Due to a generous uncle, the Williams already have enough money to pay for Mitts education. However, due to the high cost of college living expenses, the Williams will be unable to add to Brandons college fund after Mitt starts college. Therefore, they will have to stop making deposits the day that Mitt starts college. Thus the Williams will be able to make a total of 32 quarterly deposits into Brandons college fund, with the first deposit at the end of the first quarter and the final deposit occurring the day Mitt starts college. What should be the amount of these quarterly deposits?
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