Question
Luke and Monica are proud parents of baby Lily who is 2 years old. They want to send Lily to Presbyterian Ladies' College (PLC), a
Luke and Monica are proud parents of baby Lily who is 2 years old. They want to send Lily to Presbyterian Ladies' College (PLC), a prestigious private girl college, when Lily enters secondary college. They estimate that to fully fund the cost of Lily's secondary education they will need to have $120,000 at the time Lily is 13 years old. They currently
have $10,000 in an education fund for Lily which will be invested at 8% per annum until she reaches 13. They also intend to make monthly contributions into an investment account that pays 12% per annum (i.e 1% per month) with annual compounding. What is the monthly contribution if they were to achieve their saving objective of $120,000 when Lily is 13 years old?
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started