Mr Sandler deposits a lump sum into an account now to allow for withdrawals when each of his three children starts tertiary education. He calculates that he will need R30000 for the first withdrawal in 5 years time, R32500 for the second withdrawal 2 years later, and R36000 for the final withdrawal 10 years from now. If the interest rate is 12% p.a compounded monthly, calculate how much he deposited now?
30000 = x [1 + (.12/12)]^(5 * 12)
32500 = y [1 + (.12/12)]^(7 * 12)
36000 = z [1 + (.12/12)]^(10 * 12)
find x, y, and z and add them together
log(3000) = log(x) + 60 log(1.01)
log(3000) - [60 log(1.01)] = log(x)
10^[log(x)] = x