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A) To save for her newborn son's college education, Kelli Peterson will invest $1,500 at the end of each year for the next 18 years.
A) To save for her newborn son's college education, Kelli Peterson will invest $1,500 at the end of each year for the next 18 years. The interest rate she expects to earn on her investment is 9%. How much money will she have saved by the time her son turns 18
B). Briefly explain how does tax avoidance differ with tax evasion. please answer on question B
Answer for (A):
Answer : $ 61,952 |
Given |
Annual Investment = $ 1,500 |
Interest Rate ( R%) = 9% |
Time Period (N) = 18 Years |
Each Year investment is made at end of year. |
So, it is an Ordinary Annuity. |
Future Value of Ordinary Annuity = ( Annual investment / R%) x ( ( 1+ R%)^N - 1 ) |
Future Value of Ordinary Annuity = ( $ 1,500 / 9%) x ( ( 1+ 9%)^18 - 1 ) |
Future Value of Ordinary Annuity = ( $ 16,666.67 x ( 4.7171 - 1 ) |
Future Value of Ordinary Annuity = ( $ 16,666.67 x 3.7171 ) = $ 61,952.0069 |
By the end of 18 years, total saving will be $ 61,952.0069 |
Question A already answered.
Please answer question B
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