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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.

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

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

is dis correct??

  • math! -

    yes, I got the same answer to the penny!

    good job!

  • math! -

    thnx ^_^:D

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