SOLUTION: You want to start saving for your 10-year old son’s college education. If you wereguaranteed 6% interest compounded quarterly, how much would you have to save permonth to amount
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Question 1163831: You want to start saving for your 10-year old son’s college education. If you wereguaranteed 6% interest compounded quarterly, how much would you have to save permonth to amount to P12,000 by the time he is 18?
You can put this solution on YOUR website! he's 10 years old now.
he will be 18 in 8 years.
the following financial calculator will help you determine your solution. https://arachnoid.com/finance/index.html
your inputs will be:
present value = 0
future value = 12,000
interest rate per quarter = 6% per year / 4 = 1.5% per quarter.
number of quarters = 8 8 4 = 32
payments are made at the end of each quarter.
result of analysis using this calculator is that the quarterly payment needs to be 294.93.
it is shown as negative becauswe it's money you need to invest at the end of each quarter.
the future value is shown as positive because it's money you receive at the end of the investment period.
here's what the analysis looks like.
