start saving in one year from now a fixed amount for 20 total deposits. Wha is the amount of that annual savings deposit in order to save enough to fund the education? Use the $ symbol and round to the nearest thousand dollars. A correct answer would look like $13,000.

start saving in one year from now a fixed amount for 20 total deposits. Wha is the amount of that annual savings deposit in order to save enough to fund the education? Use the $ symbol and round to the nearest thousand dollars. A correct answer would look like $13,000.

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter5: The Time Value Of Money

Section: Chapter Questions

Problem 16P

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Concept explainers

Application of Time Value of Money (TVM)

The time value of money can be incorporated either by discounting the future value or by using the present value to find the future value.

Question

You plan to send your first born child to DePaul for a 4-year degree with 4
annual payments. Your first payment will start in 25 years in the amount of $
58,982.71 and grow by 9% per year. Assuming a discount rate of 6%. You
start saving in one year from now a fixed amount for 20 total deposits. What
is the amount of that annual savings deposit in order to save enough to
fund the education? Use the $ symbol and round to the nearest thousand
dollars. A correct answer would look like $13,000.

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