On the birth of a child, the father wants to deposit a sum in a savings account. He intends to provide his daughter $20,000 every month for four years, starting on her 18th birthday. If the savings bank pays 10% compounded monthly, how much should the father deposit?
Q: What lump sum do parents need to deposit in an account earning 10%, compounded monthly, so that it…
A: Two questions appear on the board. They are unrelated and are not sub parts. Hence, only the first…
Q: A man wants to set up a 529 college savings account for his granddaughter. How much would he need to…
A: The equivalent annual cost is the periodic payment made towards the acquisition of an asset or…
Q: New parents wish to save for their newborn's education and wish to have $46,000 at the end of 17…
A: Computation of yearly payment:Hence, the yearly payment is -$1,682.02.
Q: Millet wants to provide a P200,000 graduation gift for her daughter Mae who is now 16 years old. She…
A: Present value is the sum of money that must be invested in order to achieve a specific future goal.…
Q: Betty wants to save $500,000 in four years. She wants to make monthly deposits into an account which…
A: An Annuity is a continuous flow of systematic timely cash flows made or received for a stipulated…
Q: Grandparents plan to open an account on their grandchild's birthday and contribute each month until…
A: Annuity is type of financial instrument (insurance contract) in which you pay certain amount…
Q: Gabriel is able to save 10,000 pesos every month from his salary. If he decides to invest in a…
A: >Future value of any amount invested is the sum total of amount invested and the interest earned…
Q: Grandparents plan to open an account on their grandchild's birthday and contribute each month until…
A: a) Answer: Annuity due. Annuities are regular periodic payments made over a specified period. When…
Q: A couple plans to save for their child's college education. What principal must be deposited by the…
A: Present value can be defined as the amount which is to be set aside in order to have a pre-defined…
Q: Robert wants to deposit $300 into a fund at the beginning of each month. If he can earn 10%…
A: Given information : Monthly deposit = $300 Interest rate = 10% Tenure = 6 years
Q: A couple plans to save for their child's college education. What principal must be deposited by the…
A: Given information: Total amount after 18 years is $43,000 Interest rate is 8% compounded quarterly,…
Q: client plans to send a child to college for four years starting 18 years from now. having set aside…
A: First we need to calculate present value of at 17 years for 4 year collage fee by using this formula…
Q: A person wants to make an amount of $ 5,000 to accumulate over a period of 15 years so that he can…
A: Annual, or yearly, billing is a popular choice for many businesses since it delivers a whole year of…
Q: Arthur wishes to have 80,000 in her bank account. How much suould she deposit in a bank account that…
A: the answer with complete calculation are as follows
Q: New parents wish to save for their newborn's education and wish to have $45,000 at the end of 16…
A: Since you have posted a question with multiple sub-parts, we will solve first three subparts for…
Q: Upon the birth of his first child, Dick Jones decided to establish a savings account to partly pay…
A: Future value is the future worth of an investment which is calculated using the method of…
Q: New parents wish to save for their newborn's education and wish to have $37,000 at the end of 18…
A: Given P=$37,000 r= 7.8% n=1 t=18 years
Q: Starting on her 30th birthday, a woman will invest an amount every year on her birthday in an…
A: future value of annuity formula: future value of annuity=Annuity×1+rn-1r×1+rwhere,r=rate of…
Q: How much will they have in this account at the end of 1 year?
A: Information Provided: Term = 1 year Interest rate = 24% compounded monthly Monthly deposit = $1000…
Q: Willie deposits a fixed monthly amount into an annuity account for his child's college fund. He…
A: Future value of annuity = P * [ (1+r)^n - 1 ] /r Where, Future value of annuity = $75000 P =…
Q: Aylene is preparing for an income fund for her retirement. She wants to receive 15,000 pesos…
A: The annuity payments that are made at the beginning of the year are called annuity due and the ones…
Q: The Alavis have decided to invest in a their Son. college fund for They invested $50,000 deferred…
A:
Q: Your grandmother set up an annuity, in which she will receive a monthly payment from the bank of…
A: The present value of an annuity is the present value of a series of cash flows at a certain rate of…
Q: On the day the child is born, Allyson wishes to determine what lump sum would have to be paid into…
A: Here, Interest Rate (Rate) is 6% Withdrawal Amount (PMT) is Php 30,000 Time Period of Withdrawals…
Q: Frank plans to set aside money for his young daughter's college tuition. He will deposit money in an…
A: The Future Value of the Annuity refers to the sum value of all the payments which is occurred…
Q: how much will be the savings account when Tony's son becomes 16 years old?
A: Future value of an annuity: It is the future worth of the annuity cash flows over a given period. It…
Q: A young engineer wants to provide his newly born daughter a lump sum of P 2.0M when she graduates…
A: Future value required (FV) = P 2,000,000 Period = 21 Years Number of monthly payments (N) = 21*12 =…
Q: sara wants to deposit equal payments in BDO at the end of every month so that her daughter, Duchess,…
A: Here, Withdrawal Amount on 18th Birthday is 1,000,000 pesos First deposit made after one month of…
Q: A couple plans to save for their child's college education. What principal must be deposited by the…
A: Here, we need to calculate the present value which needs to be deposited or kept aside by the couple…
Q: Alexandria wants to receive $12,000 a year for 8 years. How much must Alexandria invest today in an…
A: Computation:
Q: A couple plans to save for their child's college education. What principal must be deposited by the…
A: Present Value Present value is the present worth of any sum of a money to be received in the future…
Q: At the time of her grandson's birth, a grandmother deposits $4000 in an account that pays 4.5%…
A: The value of an account is defined as the total worth of the account for holdings. Cash value is…
Q: Metehan Atay invests 550 pounds per week in the bank for an investment that will earn him 20% per…
A: An annuity is a sequence of periodic cash flows with a fixed amount at equal time intervals over a…
Q: Aziz is planning to attend college when she graduates from high school four years from now. She has…
A: Periodic Amount = 3570+5550 = 9120 Interest Rate = 8.5%/2 = 4.25% per semi annual period Time Period…
Q: As a savings program toward their child’s college education, parents decide to deposit 100 dollars…
A: A theory that helps to compute the present or future value of the cash flows is term as the TVM…
Q: A man wishes to set aside some money for his daughter’s college education. His goal is to have a…
A: Time value of money- It is based on the concept that money earned today is worth more than similar…
Q: Assume the money earns 7% interest, compounded quarterly
A: Interest rate is i=7% compounded quaterly no. of periods in a year n=4 *1=4 Time t = 18 years amount…
Q: Gary decides to set up a retirement fund by depositing $300 at the end of each week for 29 years.…
A: Payment frequency is weekly. However, the interest rate is 2.11%, compounded semiannually. Hence we…
Q: Grandparents plan to open an account on their grandchild's birthday and contribute each month until…
A: A theory that helps to compute the present or future value of the cash flows is term as the TVM…
Q: What principal must be deposited
A: Compound interest is the amount of interest that is added with the principal amount of deposit or…
Q: On his son's fifth birthday, a man decides to deposit a certain amount which will be equivalent to…
A: given, FV = 28000 NOMINAL RATE = 512%=5.5% inflation = 8.7% n = 13 years ( 18-5)
Q: z is planning to attend college when she graduates from high school four years from now. She has…
A: Money deposited in the account grow with the time according to the interest rate and time of money.…
Q: Mr & Mrs. John have decided to start a monthly savings program in order to provide for their son's…
A: Accumulated amount (F) = RM 50,000 Annual interest rate = 6% Monthly interest rate (r) = 6%/12 =…
Q: When your first child is born, you begin to save for college by depositing $500 per month in an…
A: We need to compute the future value of the recurring payments every month for the period of 18 years…
Q: A father wants to set aside money for his son's future college education. Money can be deposited in…
A: The question is based on the concept of Financial Management.
Q: If he deposits 2000 at the end of every year into a special account for seven years and the bank…
A: This problem can be solved in light of annuity and future value. Total amount in the deposit account…
Q: A mother wishes to set up a savings account for her son's education. She plans on investing $750…
A: Future value of ordinary annuity computes the total amount of periodic payments at a certain time…
Q: Frank plans to set aside money for his young daughter's college tuition. He will deposit money in an…
A: This is a case of ordinary annuity. It means that deposits are being made at the end of the relevant…
On the birth of a child, the father wants to deposit a sum in a savings account. He intends to provide his daughter $20,000 every month for four years, starting on her 18th birthday. If the savings bank pays 10% compounded monthly, how much should the father deposit?
Step by step
Solved in 2 steps
- On a child's first birthday, a parent wishes to deposit enough money so that the child can withdraw $5000 per year for five years. If the first withdrawal will be on the child's 18th birthday, how much should the parent deposit? The rate is 5% annually.The parents of a newborn decide to make deposits into an educational savingsaccount on each of their daughter's birthdays, starting with her first birthday.Assume that the educational savings account will return a constant 5.5% per year.The parents plan to deposit $2 200 on every of their daughter's future birthdays.How much money could they alternatively deposit on their daughter's birth date(today) to have the same amount available on her 18th birthday?A father wants to set aside money for his 5-year-old son's future college education. Money can be deposited in a bank account that pays 8% per year, compounded annually. What equal deposits should be made by the father, on his son's 6th through 17th birthdays, in order to provide $5000 on the son's 18th, 19th, 20th, and 21st birthdays?
- A couple with a newborn son wants to save for their child's college expenses in advance. The couple can establish a college fund that pays 8% annual interest. Assuming that the child enters college at age 18, the parents estimate that an amount of $50,000 per year will be required to support the child's college expenses for four years. Determine the equal annual amounts that the couple must save until they send their child to college. (Assume that the first deposit will be made on the child's first birthday and the last deposit on the child's 18th birthday. The first withdraw will be made at the beginning of the freshman year, which also is the child's 18th birthday.) O $4,775.80 O $6,016.13 O $6,138.52 O $4,609.37On the day his baby was born, a father decided to establish a savings account for the child’s college education. Any money that is put into the account will earn an interest rate of 8% compounded annually. The father will make a series of annual deposits in equal amounts of $5,000 on each of his child’s birthdays from the 1st through the 18th, so that he can make withdrawals from the account on the child’s 18th birthday for child's college funds. Find the amount accumulated at the end of child's 18th birthday. (Also draw the cash flow diagram).A mother wishes to set up a savings account for her son's education. She plans on investing $750 when her son is 6 months old and every 6 months thereafter. The account earns interest of 8 percent per year, compounded semiannually. (a) To what amount will the account grow by the time of her son's 18th birthday? (b) How much interest will be earned during this period?
- A couple wants to begin saving money for their daughter's education. $16,000 will be needed on the child’s 18th birthday, $18,000 on the 19th birthday, $20,000 on the 20th birthday, and $22,000 on the 21st birthday. Assume 5% interest with annual compounding. The couple is considering two methods of accumulating the money. a. How much money would have to be deposited into the account on the child's first birthday to accumulate enough money to cover the education expenses? (Note: A child’s “first birthday” is celebrated 1 year after the child is born.) b. What uniform annual amount would the couple have to deposit each year on the child’s first through seventeenth birthdays to accumulate enough money to cover the education expenses?A metallurgical engineer decides to set aside money for his newborn daughter's college education. He estimates that her needs will be $20,000 on her 17th, 18th, 19th, and 20th birthdays. If he plans to make uniform deposits starting 3 years from now and continue through year 16, what should be the size of each deposit, if the account earns interest at a rate of 8% per year?Suppose that a young couple has just had their first baby and they wish to insure that enough money will be available to pay for their child's college education. They decide to make deposits into an educational savings account on each of their daughter's birthdays, starting with her first birthday. Assume that the educational savings account will return a constant 4% per year. The parents deposit $ 10,000 on their daughter's first birthday and plan to increase the size of their deposits by 2% each year. Assuming that the parents have already made the deposit for their daughter's 18th birthday, then the amount available for the daughter's college expenses on her 18th birthday is closest to: $1,012,908 $ 147,489 $500,000 $298,785
- A man wishes to set aside some money for his daughter’s college education. His goal is to have a bank savings account containing an amount equivalent to $20,000 in today’s dollars at the girl’s 18th birthday. The estimated inflation rate is 8%. If the bank pays 5% compounded annually, what lump sum should he deposit today on the child’s 4th birthday?James deposits $266.40 each month into an annuity account for his child's college fund in order to accumulate a future value of $80,000 in 18 years. How much of the $80,000 will James ultimately deposit in the account, and how much is interest earned? Round your answers to the nearest cent, if necessary.Willie deposits a fixed monthly amount into an annuity account for his child’s college fund. He wishes to accumulate a future value of $125,000 in 15 years. Assuming an APR of 3.5% how much money should Willie deposit monthly in order to reach his goal. How much of the $125,000 will Willie ultimately deposit in the account, and how much is interest earned?