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show steps please. 1. A man wishes to set aside some money for his daughter's college education. His goal is to have a bank savings
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1. A man wishes to set aside some money for his daughter's college education. His goal is to have a bank savings account containing an amount equivalent to $20,000 in today's dollars at the girt's 18th birthday. The estimated annual inflation rate is 3%. If the bank pays 5% compounded annually, what lump sum should he deposit on the child's 4th birthday? 2. Using the CPI index of the past 10 years calculate the real average annual inflation and recalculate the lump sum in problem 1 assuming the money is put in a CD that yields a nominal rate of 3.00% compounded monthlyStep by Step Solution
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