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2. New parents wish to save for their newborn’s education and wish to have $55,000 at the end of 19 years. They make payments at the end of each month into a savings account that earns a rate of 7.6%/year compounded monthly. (a) Find the amount they need to deposit into this account each month in order to reach their goal. (Round answer to two decimal places) N = PV = PMT = FV = P/Y = C/Y = (b) How much interest would they earn over the life of the account? Use the rounded answer from part (a). (Round answer to two decimal places)

2. New parents wish to save for their newborn’s education and wish to have $55,000 at the end of 19 years. They make payments at the end of each month into a savings account that earns a rate of 7.6%/year compounded monthly. (a) Find the amount they need to deposit into this account each month in order to reach their goal. (Round answer to two decimal places) N = PV = PMT = FV = P/Y = C/Y = (b) How much interest would they earn over the life of the account? Use the rounded answer from part (a). (Round answer to two decimal places)

Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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2. New parents wish to save for their newborn’s education and wish to have $55,000 at the end of 19 years. They make payments at the end of each month into a savings account that earns a rate of 7.6%/year compounded monthly. (a) Find the amount they need to deposit into this account each month in order to reach their goal. (Round answer to two decimal places) N = PV = PMT = FV = P/Y = C/Y = (b) How much interest would they earn over the life of the account? Use the rounded answer from part (a). (Round answer to two decimal places)
Transcribed Image Text:2. New parents wish to save for their newborn’s education and wish to have $55,000 at the end of 19 years. They make payments at the end of each month into a savings account that earns a rate of 7.6%/year compounded monthly. (a) Find the amount they need to deposit into this account each month in order to reach their goal. (Round answer to two decimal places) N = PV = PMT = FV = P/Y = C/Y = (b) How much interest would they earn over the life of the account? Use the rounded answer from part (a). (Round answer to two decimal places)
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