Madison is planning to save for his newborn daughter’s college tuition, to be paid in 18 years. The amount he wishes to have by that time is $70,000. He plans to deposit $2,300 in a bank account every year for 18 years, starting next year. Suppose the account pays 2% interest on deposits, compounded annually. How much would he need to deposit right now, to make up the remaining amount necessary by the end of 18 years? a. $13,378.03 b. $14,529.48 c. $15,841.33 d. $17,003.96 e. $18,458.72.
Madison is planning to save for his newborn daughter’s college tuition, to be paid in 18 years. The amount he wishes to have by that time is $70,000. He plans to deposit $2,300 in a bank account every year for 18 years, starting next year. Suppose the account pays 2% interest on deposits, compounded annually. How much would he need to deposit right now, to make up the remaining amount necessary by the end of 18 years? a. $13,378.03 b. $14,529.48 c. $15,841.33 d. $17,003.96 e. $18,458.72.
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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Madison is planning to save for his newborn daughter’s college tuition, to be paid in 18 years. The amount he wishes to have by that time is $70,000. He plans to deposit $2,300 in a bank account every year for 18 years, starting next year. Suppose the account pays 2% interest on deposits, compounded annually. How much would he need to deposit right now, to make up the remaining amount necessary by the end of 18 years?
a. $13,378.03
b. $14,529.48
c. $15,841.33
d. $17,003.96
e. $18,458.72.
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