Your cousin is currently 12 years old. She will be going to college in 6 years. Your aunt and uncle would like to have $115,000 in a savings account to fund her education at that time. If the account promises to pay a fixed interest rate of 4.3% per year, how much money do they need to put into the account today to ensure that they will have $115,000 in 6 years?
Your cousin is currently 12 years old. She will be going to college in 6 years. Your aunt and uncle would like to have $115,000 in a savings account to fund her education at that time. If the account promises to pay a fixed interest rate of 4.3% per year, how much money do they need to put into the account today to ensure that they will have $115,000 in 6 years?
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:Your cousin is currently 12 years old. She will be going to college in 6 years. Your aunt and uncle would like to have $115,000 in a savings account
to fund her education at that time. If the account promises to pay a fixed interest rate of 4.3% per year, how much money do they need to put into the
account today to ensure that they will have $115,000 in 6 years?
The amount they need to put away today is $
(Round to the nearest cent.)
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