To provide for a college education for her son, a woman opened an escrow account in...

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To provide for a college education for her son, a woman opened an escrow account in which equal deposits were made. The first deposit was made on January 1, 1998, and the last deposit was made on January 1, 2015. The yearly college expenses including tuition were estimated to be $8500, for each of the 4 years. Assuming the interest rate to be 4.5%, how much did the mother have to deposit each year in the escrow account for the son to draw $8500 per year for 4 years beginning January 1, 2015? Solution: Determine the required present worth of the escrow account on January 1, 2015: W2015 +8500*( * 4.5%, )= In order to have this amount at the end of 2014 (or 01/01/2015), need to determine what yearly deposits should have been over the period 1998-2015: A= *(P/A 4.5%. )= To provide for a college education for her son, a woman opened an escrow account in which equal deposits were made. The first deposit was made on January 1, 1998, and the last deposit was made on January 1, 2015. The yearly college expenses including tuition were estimated to be $8500, for each of the 4 years. Assuming the interest rate to be 4.5%, how much did the mother have to deposit each year in the escrow account for the son to draw $8500 per year for 4 years beginning January 1, 2015? Solution: Determine the required present worth of the escrow account on January 1, 2015: W2015 +8500*( * 4.5%, )= In order to have this amount at the end of 2014 (or 01/01/2015), need to determine what yearly deposits should have been over the period 1998-2015: A= *(P/A 4.5%. )=