b) If you can earn 12 percent on your investments, and you would like to accumulate $120,000 for your newborn child's education at the end of 18 years, how much must you invest annually to reach your goal? MT [(1 +² -1] FV₁ = PMT FVn = FV of annuity at the end of nth period. PMT = annuity payment deposited or received at the end of each period i = interest rate per period n = number of periods for which annuity will last
b) If you can earn 12 percent on your investments, and you would like to accumulate $120,000 for your newborn child's education at the end of 18 years, how much must you invest annually to reach your goal? MT [(1 +² -1] FV₁ = PMT FVn = FV of annuity at the end of nth period. PMT = annuity payment deposited or received at the end of each period i = interest rate per period n = number of periods for which annuity will last
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
![b) If you can earn 12 percent on your investments, and you would like to accumulate
$120,000 for your newborn child's education at the end of 18 years, how much
must you invest annually to reach your goal?
FV. - PMT (1+1)-1)
FVn = FV of annuity at the end of nth period.
PMT= annuity payment deposited or received at the end of each period
i = interest rate per period
n = number of periods for which annuity will last](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F548f144b-9127-46bb-ba4e-7cbbebe00421%2F85489a67-22f8-40b3-9e75-6de67a74fb43%2Fn18634_processed.jpeg&w=3840&q=75)
Transcribed Image Text:b) If you can earn 12 percent on your investments, and you would like to accumulate
$120,000 for your newborn child's education at the end of 18 years, how much
must you invest annually to reach your goal?
FV. - PMT (1+1)-1)
FVn = FV of annuity at the end of nth period.
PMT= annuity payment deposited or received at the end of each period
i = interest rate per period
n = number of periods for which annuity will last
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