Jay is now 13 years old, residing in San Diego. By the age of 18, he aspires to enroll in a 4-year industrial engineering program at MIT in Cambridge, Massachusetts. He plans to visit his family back in San Diego once every summer at the end of each academic year then. It is anticipated that the cost of roundtrip airfare tickets is $420 in his first year at MIT, then rising by 5% each year thereafter until he graduates. He wants to save in advance for the cost of the airfare tickets. Starting a year from now, Jay plans to make only four (4) consecutive uniform deposits into a Citibank savings account that earns 8% interest per year. Calculate the amount of the yearly deposits that he has to make in order to cover (well in advance) in advance the entire cost of the 4 roundtrip airfare tickets while at MIT.

Jay is now 13 years old, residing in San Diego. By the age of 18, he aspires to enroll in a 4-year industrial engineering program at MIT in Cambridge, Massachusetts. He plans to visit his family back in San Diego once every summer at the end of each academic year then. It is anticipated that the cost of roundtrip airfare tickets is $420 in his first year at MIT, then rising by 5% each year thereafter until he graduates. He wants to save in advance for the cost of the airfare tickets. Starting a year from now, Jay plans to make only four (4) consecutive uniform deposits into a Citibank savings account that earns 8% interest per year. Calculate the amount of the yearly deposits that he has to make in order to cover (well in advance) in advance the entire cost of the 4 roundtrip airfare tickets while at MIT.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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