How much money will the smiths have to deposit each first of the month after their child is born until its 18th birthday in order to have enough saved up for college ($196000)?
.3% APR.
I will assume there will be 216 monthly deposits (18x12).
The formula I will use assumes that the payment is made at the end of the month, but with that many payments and that trivial rate of interest it will be very little difference.
i = .003/12 = .00025
p (1.00025^216 - 1)/.00025 = 196000
p = appr $ 883
notice that dividing 196000/216 with no interest gained at all = $907
What a horrible plan,