Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

You decide to set up a college fund for your 10-year-old child and plan to make annual deposits into the account each year on

You decide to set up a college fund for your 10-year-old child and plan to make annual deposits into the

You decide to set up a college fund for your 10-year-old child and plan to make annual deposits into the account each year on your child's birthday. Because "other things" consistently use more of your money than anticipated, your deposits are actually somewhat erratic. One year even resulted in a withdrawal. The account earns 5% per year. Birthday Deposit Birthday Deposit 10 $1,000 15 $3,000 11 $1,000 16 $2,500 12 $2,000 17 $2,000 $1,500 18 13 $2,000 14 -$1,500 a. How much is in the account immediately after the deposit on your child's 18th birthday? b. How much would you have needed to deposit on each birthday to accumulate the same total if you had started on your child's 10th birthday and made equal annual deposits with no withdrawals? c. How much would you have needed to deposit on each birthday to accumulate the same total if you had started on your child's 1st birthday and made equal annual deposits with no withdrawals?

Step by Step Solution

There are 3 Steps involved in it

Step: 1

a Immediately after the deposit on the 18th birthday the total amount in the account is Initial depo... blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Management And Organisational Behaviour

Authors: Laurie Mullins

7th Edition

0273688766, 978-0273688761

More Books

Students also viewed these Finance questions

Question

explain too 5.14 Which do you expect to be more acidic

Answered: 1 week ago