A family wishes to accumulate $ 50,000 in a college education fund by the end of 20 years. They do this by depositing $1000 into the fund at the end of each of the first 10 years, and $1000 + x at the end of each of the second 10 years, compute x if the fund earns 7% effective.

A family wishes to accumulate $ 50,000 in a college education fund by the end of 20 years. They do this by depositing $1000 into the fund at the end of each of the first 10 years, and $1000 + x at the end of each of the second 10 years, compute x if the fund earns 7% effective.

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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Question

A family wishes to accumulate $
50, 000 in a college education fund
by the end of 20 years. They do this
by depositing $1000 into the fund at
the end of each of the first 10 years,
and $1000 + x at the end of each of
the second 10 years, compute x if the
fund earns 7% effective.

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