Your brother has decided to ask you for advice about saving up for his teenager's college fund. He plans on withdrawing $15,000 at the end of year 5, $17,000 at the end of year 6, and $20,000 each at the end of year 7 and year 8. How much does your brother need to deposit today into an account with an annual interest rate of 1%?

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
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Your brother has decided to ask you for
advice about saving up for his teenager's
college fund.
He plans on withdrawing $15,000 at the
end of year 5, $17,000 at the end of year
6, and $20,000 each at the end of year 7
and year 8.
How much does your brother need to
deposit today into an account with an
annual interest rate of 1%?
Transcribed Image Text:Your brother has decided to ask you for advice about saving up for his teenager's college fund. He plans on withdrawing $15,000 at the end of year 5, $17,000 at the end of year 6, and $20,000 each at the end of year 7 and year 8. How much does your brother need to deposit today into an account with an annual interest rate of 1%?
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