A new mother would like to start a college fund for her newborn daughter. She makes quarterly deposits of$400 into a college fund that earns 6% compounded quarterly for the next 18 years.How much will her daughter have available in her college fund when she turns 18? $Round to the nearest dollarWhat is total amount the mother deposited into the fund over the 18 years? $Round to the nearest dollarHow much interest was earned over the 18 years? $Use the WHOLE DOLLAR AMOUNTS you entered in as your answers above.4Round to the nearest dollar

Time value of money :— According to this concept, value of money in present day is greater than the…

Answered: A new mother would like to start a…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Starting on the day Kelly was born, her mother has invested $50 at the beginning of every month in a savings account that earns 2.20% compounded monthly. a. How much did Kelly have in this account on her 22nd birthday? Assume that there was no deposit on that day. b. What was her mother's total investment? c. How much interest did the investment earn? How much should Diana's dad invest into a savings account today, to be able to pay for Diana's rent for the next five years if rent is $950 payable at the beginning of each month? The savings account earns 3.75% compounded monthly.
Question - : Your child is going to college for the next 4 years. You are setting up a college fund that your child withdraws from at the BEGINNING of each 6 month period (2 withdrawls each year). Each withdrawl is $ 3000. The account pays 12% annual interest rate, compounded 2 times a year. How much money should you put in the account now?
You want your daughter to be a millionaire. She is 3 years old today when you deposit $42,000 in an account that earns 8.2% per year. The funds in the account will be distributed to your daughter whenever the total reaches $1,000,000. How old will your daughter be when she gets the money?
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At the time of her grandson's birth, a grandmother deposits $4000 in an account that pays 4% compounded monthly. What will be the value of the account at the child's twenty-first birthday, assuming that no other deposits or withdrawals are made during this period? Click the icon to view some finance formulas. The value of the account will be $ (Round to the nearest dollar as needed.) Formulas In the provided formulas, A is the balance in the account after t years, P is the principal investment, r is the annual interest rate in decimal form, n is the number of compounding periods per year, and Y is the investment's effective annual yield in decimal form. nt A=P(1+1) " P= A (₁.3⁰² Print A=Pet Y Done -1
The parents of a 3-year old child decide they need to start saving for their child's college fund. They want to have $22,000 in the fund in 15 years. The fund has an APR of 3.4%. What monthly deposit is required? Round your answer to the nearest cent.
Your daughter needs to be able to draw $50,000 a year from her college savings fund (you started from birth) to pay for college expenses to obtain a medical degree (assume she spends 4 years for bachelor, 4 years for med school, then additional 2 years as resident and yearly spending will be consistent from year to year). At start of her college career, she intends to invest her savings in government securities that should return 5.5% a year compuounded continuously. a. Obtain the equation for dP/dt and then find the genearl solution of P(t) with, as yet undetermined, initial value P_0. b. How large must your daughter's initial college savings be so that she can continue drawing her $50,000 income until she becomes a doctor?
The parents of a newborn decide to make deposits into an educational savingsaccount on each of their daughter's birthdays, starting with her first birthday.Assume that the educational savings account will return a constant 5.5% per year.The parents plan to deposit $2 200 on every of their daughter's future birthdays.How much money could they alternatively deposit on their daughter's birth date(today) to have the same amount available on her 18th birthday?
New parents wish to save for thier newborn's education and wish to have $36,000 at the end of 18 years. How much should the parents place at the end of each year into a savings account that earns an annual rate of 5.6% compounded annually? (round your answer to two decimal places). How much interst would they earn over the life of the account? Determine the value of the fund after 12 years.
A mother is thinking about funding her daughter’s medical education in 6 years when she is expected to enrol at UWI, St. Augustine. She opens a special savings account, where she can receive a lump sum in 6 years. If she is desirous of receiving $50,000 in 6 years when her daughter is matriculating, how much would you advise her to deposit in the savings account monthly if annual interest rate is 7%? Show all working.
A) When Liam Corbett was born, his grandparents opened a 529 college savings plan for him so that he had enough money to pay for college once he turned 18. His college education is expected to cost $225,000 on the day he turns 18 years old. Determine if there will be enough in the account given the following assumptions (Show your calculations): Assumption #1: The grandparents contribute $6,200 per year starting the day Liam is born and the account earns an average annual rate of return of 7%. Assumption # 2: The grandparents contribute $5,000 per year starting the day Liam is born and the account earns an average annual rate of return of 7%. Assumption # 3: The grandparents contribute $5,000 per year starting the day Liam is born and the account earns an average annual rate of return of 9%. Assumption #4: The grandparents contribute $8,500 per year starting the day Liam is born and the account earns an average annual rate of return of 4%. Assumption # 5: The grandparents contribute…
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