Question
Joe is opening an educational fund for his son who needs to go to graduate school for 2 years from now. Joe has the money
Joe is opening an educational fund for his son who needs to go to graduate school for 2 years from now. Joe has the money to invest in two different funds, A and B, now. The first fund (A) matures every year with a rate of return of 4%. The second fund (B) matures every 2 years with a rate of return of 9%. His son requires $19,000 for each of the 3 years that he is in graduate school. Joe wants to invest in the funds and pay the required education expenses from the amount maturing from the prior investments. Let A1 be the amount of money invested in fund A for the first year, B1 be the amount of money invested in fund B for the first year, and so on.Question 2What is year 3 cash flow?
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