Question
Jerry was born today. His grandmother has set up a savings account for him with the following terms: Starting the day Jerry turns 18, he
Jerry was born today. His grandmother has set up a savings account for him with the following terms: Starting the day Jerry turns 18, he will receive $1,000 on each birthday through his 29th birthday. To ensure that Jerry will have enough money, Jerry's grandmother is going to put aside in the saving account a constant amount of money every year for the next 10 years where the first payment will be made a year from today. Recall that today is year 0. Assume an interest rate of 10%.
How much does his grandmother need to put aside every year to ensure there's enough money in the account in 10 years? Round to the nearest dollar. Hint: Use the amount to be in the account 10 years from now.
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