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3. Shondra wishes to accumulate a college fund for her daughter by making 17 equal annual deposits be- ginning on the daughter's first birthday. The fund will be used to make four annual tuition payments beginning on the daughter's 18th birthday. The first tuition payment will be $15,000, with the subsequent payments increasing by 8% each year. Shondra earns interest on her investment at a 5% annual effective rate. Determine the minimum amount of her annual deposit. A. Less than $2,200 B. At least $2,200, but less than $2,400 C. At least $2,400, but less than $2,600 D. At least $2,600, but less than $2,800 E. At least $2,800

3. Shondra wishes to accumulate a college fund for her daughter by making 17 equal annual deposits be- ginning on the daughter's first birthday. The fund will be used to make four annual tuition payments beginning on the daughter's 18th birthday. The first tuition payment will be $15,000, with the subsequent payments increasing by 8% each year. Shondra earns interest on her investment at a 5% annual effective rate. Determine the minimum amount of her annual deposit. A. Less than $2,200 B. At least $2,200, but less than $2,400 C. At least $2,400, but less than $2,600 D. At least $2,600, but less than $2,800 E. At least $2,800

Cornerstones of Cost Management (Cornerstones Series)
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter19: Capital Investment
Section: Chapter Questions
Problem 8E
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3. Shondra wishes to accumulate a college fund for her daughter by making 17 equal annual deposits be- ginning on the daughter's first birthday. The fund will be used to make four annual tuition payments beginning on the daughter's 18th birthday. The first tuition payment will be $15,000, with the subsequent payments increasing by 8% each year. Shondra earns interest on her investment at a 5% annual effective rate. Determine the minimum amount of her annual deposit. A. Less than $2,200 B. At least $2,200, but less than $2,400 C. At least $2,400, but less than $2,600 D. At least $2,600, but less than $2,800 E. At least $2,800
Transcribed Image Text:3. Shondra wishes to accumulate a college fund for her daughter by making 17 equal annual deposits be- ginning on the daughter's first birthday. The fund will be used to make four annual tuition payments beginning on the daughter's 18th birthday. The first tuition payment will be $15,000, with the subsequent payments increasing by 8% each year. Shondra earns interest on her investment at a 5% annual effective rate. Determine the minimum amount of her annual deposit. A. Less than $2,200 B. At least $2,200, but less than $2,400 C. At least $2,400, but less than $2,600 D. At least $2,600, but less than $2,800 E. At least $2,800
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