Chapter 9, Problem 46P

Your younger sister, Linda, will start college in five years. She has just informed your parents that she wants to go to Hampton University, which will cost $\text{\$17,000}$ per year for four years (cost assumed to come at the end of each year). Anticipating Linda’s ambitions, your parents started investing $\text{\$2,000}$ per year five years ago and will continue to do so for five more years. How much more will your parents have to invest each year (A?) for the next five years to have the necessary funds for Linda’s education? Use 10 percent as the appropriate interest rate throughout this problem (for discounting or compounding).