You are planning for your child's education. You would like to make deposits every 26 weeks (half year) in Years 0 through 21, with your first deposit to be made today (a total of 43 deposits), so that your child may make withdrawals in each of the Years 18 through 21 for tuition. Tuition is currently $2,900/year, and is expected to grow at 4% for each of the next 10 years, and then at 5% for each of years 11 through 21. You can earn a nominal annual rate of 8.632%, with interest compounded weekly (52-week year) in a college savings account. How much must you deposit every 26 weeks? $245.56 $219.25 $236.79 $254.33 $228.02
You are planning for your child's education. You would like to make deposits every 26 weeks (half year) in Years 0 through 21, with your first deposit to be made today (a total of 43 deposits), so that your child may make withdrawals in each of the Years 18 through 21 for tuition. Tuition is currently $2,900/year, and is expected to grow at 4% for each of the next 10 years, and then at 5% for each of years 11 through 21. You can earn a nominal annual rate of 8.632%, with interest compounded weekly (52-week year) in a college savings account. How much must you deposit every 26 weeks? $245.56 $219.25 $236.79 $254.33 $228.02
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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Transcribed Image Text:You are planning for your child's education. You would like to make deposits every 26 weeks
(half year) in Years O through 21, with your first deposit to be made today (a total of 43
deposits), so that your child may make withdrawals in each of the Years 18 through 21 for
tuition. Tuition is currently $2,900/year, and is expected to grow at 4% for each of the next
10 years, and then at 5% for each of years 11 through 21. You can earn a nominal annual rate
of 8.632%, with interest compounded weekly (52-week year) in a college savings account.
How much must you deposit every 26 weeks?
O $245.56
O $219.25
O $236.79
O $254.33
$228.02
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