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What lump sum do parents need to deposit in an account earning 10%, compounded monthly, so that it will grow to $90,000 for their son's college fund in 11 years? (Round your answer to the nearest cent.) $

What lump sum do parents need to deposit in an account earning 10%, compounded monthly, so that it will grow to $90,000 for their son's college fund in 11 years? (Round your answer to the nearest cent.) $

EBK CFIN
EBK CFIN
6th Edition
ISBN:9781337671743
Author:BESLEY
Publisher:BESLEY
Chapter4: Time Value Of Money
Section: Chapter Questions
Problem 11PROB
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What lump sum do parents need to deposit in an account earning 10%, compounded monthly, so that it will grow to $90,000 for their son's college fund in 11 years? (Round your answer to the nearest cent.) $
Transcribed Image Text:What lump sum do parents need to deposit in an account earning 10%, compounded monthly, so that it will grow to $90,000 for their son's college fund in 11 years? (Round your answer to the nearest cent.) $
Twins graduate from college together and start their careers. Twin 1 invests $2500 at the end of each year for 10 years only (until age 30) in an account that earns 9%, compounded annually. Suppose that twin 2 waits until turning 40 to begin investing. How much must twin 2 put aside at the end of each year for the next 25 years in an account that earns 9% compounded annually in order to have the same amount as twin 1 at the end of these 25 years (when they turn 65)? (Round your answer to the nearest cent.) $
Transcribed Image Text:Twins graduate from college together and start their careers. Twin 1 invests $2500 at the end of each year for 10 years only (until age 30) in an account that earns 9%, compounded annually. Suppose that twin 2 waits until turning 40 to begin investing. How much must twin 2 put aside at the end of each year for the next 25 years in an account that earns 9% compounded annually in order to have the same amount as twin 1 at the end of these 25 years (when they turn 65)? (Round your answer to the nearest cent.) $
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