Explanation Given information: For a child born in 2002 , the cost of 4 - years college education at a public university is projected to be $ 160.000 . Assuming an 8 % per annum rate of return compounded monthly. Formula used: Theorem of amount of an annuity: Suppose that P is the deposit in dollars made at the end of each payment period for an annuity paying i percent interest per payment period. The amount A of the annuity after n deposits is A = P ( 1 + i ) n − 1 i Calculation: The cost of 4 - years college education at a public university is projected to be $ 160.000 so A = $ 160000 . Per annum rate of return is 8 % compounded monthly. Per month rate of return is 0.08 12 . The number of deposits, n = 18 × 12 = 216 . By using the theorem of amount of an annuity, The amount that should be placed in the saving account A = P ( 1 + 0

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Chapter 12.3, Problem 94AYU

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To calculate: The amount which must be contributed to college fund every moth to have $160,000 in 18 years when the child begins college. Assuming an 8% per annum rate of return compounded monthly.

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Chapter 12.3, Problem 93AYU

Chapter 12.3, Problem 95AYU

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The amount which must be contributed to college fund every moth to have $ 160 , 000 in 18 years when the child begins college. Assuming an 8 % per annum rate of return compounded monthly.

Solution Summary: The author calculates the amount that must be contributed to a college fund every month to have 160,000 in 18 years when the child begins college.

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To calculate: The amount which must be contributed to college fund every moth to have $160,000 in 18 years when the child begins college. Assuming an 8% per annum rate of return compounded monthly.

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