Question
Mr. Pink set up a trust fund today for his great-granddaughters college education, where he will make end of the month deposits for exactly 17
Mr. Pink set up a trust fund today for his great-granddaughters college education, where he will make end of the month deposits for exactly 17 years. The trust fund would then pay his great granddaughter $5,000 at the end of the quarter over 6 years after she turns 17 and goes to college. If we assume interest rates are 3% compounded semi-annually (always), how large must the original end of the month deposits be to support the payments while she is in college? (4 marks-total timeline is 23 years) 11a) How much money is needed in 17 years to pay the $5,000 quarterly payments. 11b) How large must the monthly payments be over the 17 years?
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