Your younger sister, Barbara, will start college in five years. She has just informed your parents that she wants to go to Eastern University, which will cost $34,000 per year for four years (assumed to come at the end of each year). Anticipating Barbara's ambitions, your parents started investing $5,400 per year five years ago and will continue to do so for five more years. Use 12 percent as the appropriate interest rate throughout this problem (for discounting or compounding). How much more will your parents have to invest each year for the next five years to have the necessary funds for Barbara's education? (Use a Financial calculator to arrive at the answer. Do not round intermediate calculations. Round the final answer to the nearest whole dollar.) Investment each year
Your younger sister, Barbara, will start college in five years. She has just informed your parents that she wants to go to Eastern University, which will cost $34,000 per year for four years (assumed to come at the end of each year). Anticipating Barbara's ambitions, your parents started investing $5,400 per year five years ago and will continue to do so for five more years. Use 12 percent as the appropriate interest rate throughout this problem (for discounting or compounding). How much more will your parents have to invest each year for the next five years to have the necessary funds for Barbara's education? (Use a Financial calculator to arrive at the answer. Do not round intermediate calculations. Round the final answer to the nearest whole dollar.) Investment each year
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Transcribed Image Text:Your younger sister, Barbara, will start college in five years. She has just informed your parents that she wants to go to Eastern
University, which will cost $34,000 per year for four years (assumed to come at the end of each year). Anticipating Barbara's
ambitions, your parents started investing $5,400 per year five years ago and will continue to do so for five more years. Use 12
percent as the appropriate interest rate throughout this problem (for discounting or compounding).
How much more will your parents have to invest each year for the next five years to have the necessary funds for Barbara's
education? (Use a Financial calculator to arrive at the answer. Do not round intermediate calculations. Round the final
answer to the nearest whole dollar.)
gy
Investment each year
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