Bobby's parents loaned him $110,000 to fund his college education. His parents are not charging interest. They desire to be paid one lump sum of $110,000 when Bobby can accumulate that amount. Bobby established a savings plan that earns 4% compounded annually. His new job promises to pay an annual holiday bonus that will enable him to make equal annual, year-end deposits of $6500 starting next year. Approximately how many years will it take Bobby to accumulate the $110,000?
Bobby's parents loaned him $110,000 to fund his college education. His parents are not charging interest. They desire to be paid one lump sum of $110,000 when Bobby can accumulate that amount. Bobby established a savings plan that earns 4% compounded annually. His new job promises to pay an annual holiday bonus that will enable him to make equal annual, year-end deposits of $6500 starting next year. Approximately how many years will it take Bobby to accumulate the $110,000?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Bobby's parents loaned him $110,000 to fund his college education. His parents are not charging interest. They desire to be paid one lump sum of $110,000 when Bobby can accumulate that amount. Bobby established a savings plan that earns 4% compounded annually. His new job promises to pay an annual holiday bonus that will enable him to make equal annual, year-end deposits of $6500 starting next year. Approximately how many years will it take Bobby to accumulate the $110,000?
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