SOLUTION: If four years of college is expected to coast $135000 10 years from now, how much must be deposited now into an account that will average %4 annually in order to save the $135000?

Question 33737: If four years of college is expected to coast $135000 10 years from now, how much must be deposited now into an account that will average %4 annually in order to save the $135000?
Answer by stanbon(75887) (Show Source): You can put this solution on YOUR website!
Future Value = (payment)[(1+i)n-1]/i
payment= [(future val]i]/[(1+i)^n-1]
payment=[135000(0.04)]/[1.04^10-1]
=5400/0.48=$11244.28 per year.
For the formula search "Future Value Annity" on Google.
Cheers,
Stan H.
RELATED QUESTIONS
�If 4 years of college are expected to cost $150,000 18 years from now, how much must be... (answered by josmiceli)

how much money must be deposited now in an account paying 8% annual interest, compounded... (answered by Alan3354)

How much money must be deposited now in an account paying 8% annual interest, compounded... (answered by Jstrasner)

How much money must be deposited now in an account paying 7.25% annual interest,... (answered by Shin123)

Find how much money needs to be deposited now into an account to obtain $7700 in 15 years (answered by Boreal)

Find how much money needs to be deposited now into an account to obtain $1,000 (future... (answered by ikleyn)

Find how much money needs to be deposited now into an account to obtain $1,000(future... (answered by VFBundy)

Find how much money needs to be deposited now into a account to obtain $3900 and 12... (answered by ikleyn)

Find how much money needs to be deposited now into an account to obtain $1,700 (Future... (answered by mathmate)