Annuity!

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When Raisel's son was born, she put $7,500 in an investment that earns 5.25% compounded quarterly. This investment will mature when her son turns 18 and will go straight into an annuity at 7.25% compounded and paying out monthly at the end of the period. The investment was to help pay for his 4-years of college. Find the size of these monthly payments received by Raisel's son during his college stay.

  • Annuity! -

    just change the appropriate numbers in the posting

    http://www.jiskha.com/display.cgi?id=1270952022

    They are the same question.

  • Annuity! -

    at age 18:
    the amount of the investment = the present value of the annuity

    6500(1.019375)^72 = x(1-0.0725/12^-48)/(0.0450/4)
    19,177.84 = x(41.55860953)
    x=461.46

    is dis correct!!!

  • Annuity! -

    oh no...i mixed the queston
    sry...ill try again!! oops

  • Annuity! -

    7500(1.013125)^72 = x(1-.0725/12^-48)/(.0725/12
    19177.84 = x(41.55860953)
    461.46 = x

    is dis correct??

  • Annuity! -

    I got the same result to the penny!

    good job!

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