SOLUTION: Please help me solve this word problem: Susie wants to set up a college fund for her daughter Mary. She calculates that Mary will need to withdraw $2,200 four times a year for the

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Question 1078069: Please help me solve this word problem:
Susie wants to set up a college fund for her daughter Mary. She calculates that Mary will need to withdraw $2,200 four times a year for the next four years. How much will Susie need to have in Mary's college fund if the fund pays 6%, compounded quarterly?
I have tried the annuity due and the ordinary annuity equations, but neither is giving me the correct answer.
Answer by jorel1380(3719) About Me  (Show Source):
You can put this solution on YOUR website!
To answer this question, we use the formula P=payout[(1+r)^n -1]/r(1+r)^n, where P is the principal, r is the periodic interest rate, and n is the total number of periods. So, for this example, we have:
P=2200[(1+.06/4)^16 -1]/.06/4*(1+.06/4)^16
P=591.76820483920722046352555284907
P=$31088.7808997 as the amount needed to fund the annuity properly. ☺☺☺☺