A couple would like to create a college fund for their newborn son. They estimate they will need $150,000 in 18 years. Assume they can obtain a 4% return, how much would they need to invest annually to reach this goal? Use Appendix A-3

Appendix A-3 F n 1% 2% 3% 4% 1 1.0000 1.0000 1.0000 1.0000 N 2.0100 2.0200 2.0300 2.0400 3 3.0301 3.0604 3.1216 3.0909 4.1836 4 4.0604 4.2465 4.1216 5.2040 5 5.1010 5.3091 5.4163 6 6.1520 6.6330 6.4684 7.6625 7 6.3081 7.4343 8.5830 7.2135 7.8983 9.2142 8 8.2857 8.8923 9 9.3685 9.7546 10.1591 10.5828 10 10.4622 10.9497 11.4639 12.0061 11 11.5668 12.1687 2 12 13 12.6825 13.4121 13.8093 14.6803 14.9474 15.9739 12.8078 14.1920 15.6178 17.0863 18.5989 13.4864 15.0258 16.6268 18.2919 20.0236 14 4 15 16.0969 17.2934 16 17.2579 18.6393 20.1569 21.8245 17 21.7616 18.4304 20.0121 19.6147 21.4123 23.6975 25.6454 18 23.4144