posted by Thara! .
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.
just change the appropriate numbers in the posting
They are the same question.
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)
is dis correct!!!
oh no...i mixed the queston
sry...ill try again!! oops
7500(1.013125)^72 = x(1-.0725/12^-48)/(.0725/12
19177.84 = x(41.55860953)
461.46 = x
is dis correct??
I got the same result to the penny!