A family wants to have a $130,000 college fund for their children at the end of 17 years. What contribution must be made at the end of eachquarter if their investment pays 7.3%, compounded quarterly?(a) State whether the problem relates to an ordinary annuity or an annuity due.ordinary annuityannuity due(b) Solve the problem. (Round your answer to the nearest cent.)$7

Step 1:The quarterly interest rate is 7.3% divided by 4, which is 1.825%.

Answered: A family wants to have a $130,000…

Financial Accounting Intro Concepts Meth/Uses

14th Edition

ISBN:9781285595047

Author:Weil

Publisher:Weil

ChapterA: Appendix - Time Value Of Cash Flows: Compound Interest Concepts And Applications

Section: Chapter Questions

Problem 13E

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A family wants to have a $130,000 college fund for their children at the end of 17 years. What contribution must be made at the end of each quarter if their investment pays 7.3%, compounded quarterly?