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?
Algebra ->
Customizable Word Problem Solvers
-> Finance
-> 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?
Log On
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.
(