Brittany's parents want their child to go to the same college that they did. After talking with the college, they decided to pay a lump sum payment today so their child will have 5 years of prepaid tuition, fees, and housing for college. The college can receive 2.8%, compounded semi-annual in an annuity and will need to have $24,000.00 paid at the end of every six months for 5 years that Brittany will be attending school. If Brittany will attend school in 11 years, how much was deposited with the college?
Brittany's parents want their child to go to the same college that they did. After talking with the college, they decided to pay a lump sum payment today so their child will have 5 years of prepaid tuition, fees, and housing for college. The college can receive 2.8%, compounded semi-annual in an annuity and will need to have $24,000.00 paid at the end of every six months for 5 years that Brittany will be attending school. If Brittany will attend school in 11 years, how much was deposited with the college?
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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Brittany's parents want their child to go to the same college that they did. After talking with the college, they decided to pay a lump sum payment today so their child will have 5 years of prepaid tuition, fees, and housing for college. The college can receive 2.8%, compounded semi-annual in an
Brittany's parents deposited $ with the college. (Round to 2 decimal places.)
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Step 1
Working of the amount put down by the Brittany’s Parents is shown:
Hence, the amount deposited will be $163,875.37.
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