Question 984429
 
Given:
5 children need to pay 4100 each per year as of a year from now.
Each child is born a year apart and the oldest one has one year left.
Need initial investment to pay for all schooling, given that 14% per year is paid for the investment.
 
Solution.
Principle + Interest rate , R = 1+0.14=1.14
 
A year from now: Need to pay for 4 children, or 4*4100
2 years from now: need to pay 3*4100
3 years from now: need to pay 2*4100
4 years from now: need to pay 1*4100.
 
Reducing each annual amount to present value, and add:
Total investment = 4100(4/R+3/R^2+2/R^3+1/R^4)=31812.7111
 
Check for amount left at the end of the fourth year:
(((31812.7111*R-4*4100)R-3*4100)*R-2*4100)*R-4100=0.0000295 =0 approx. ok.