Posted by mark on Sunday, May 22, 2011 at 8:31pm.
you are planning for your kids future education. he is 8 years old now and will start in ten years. How much will you have to set aside each year in order to have 65,000.00 if the interest rate is 7%.
msth - i gotcha dude, Sunday, May 22, 2011 at 9:13pm
7% of 65000 = 4500
4500 divided by 10years = 455
msth - Reiny, Sunday, May 22, 2011 at 9:27pm
Using the Future Amount formula
Amount = payment( (1+i)^n - 1)/i
let the payment be P
Amount = 65000
I = .07
n = 10
P( 1.07^10 - 1)/.07 = 65000
P( 1.07^10 - 1) = 4550
P = 4550/(1.07^10 - 1) = 4704.54
The amount set aside each year for 10 yrs has to be
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