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please show your steps Your father discovered that you are taking a finance class and asked your advice about how much he should save for
please show your steps
Your father discovered that you are taking a finance class and asked your advice about how much he should save for your little sister Sofia's education. Assume the following. Sofia will enter college (a 4-year degree) in exactly 12 years to the day). In 12 years college will cost $40,000 per year and will increase at the rate of 3% per year. Payments to the college are due at the beginning of the academic year. (Thus, the first payment is due 12 years, to the day, after your father open Sofia's account.) Your father will invest yearly (at the end of each year) in an account that is opened today and has an effective annual rate of 6%. Finally, Sofia's aunt promises to deposit $5000 in the account when Sofia will turn 16 in exactly 10 years (one time only deposit from her aunt). How much should your father deposit each year for the next 12 years to be able to send Sofia to college? (Thus, the last payment into the account will be made on the day Sofia's first tuition payment is due.)Step by Step Solution
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