Solution-Arrangement with her father to do the household

Arrangement with her father to do the household chores

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Reference no: EM131094132

Ashley is planning to attend college when she graduates from high school 7 years from now. She anticipates that she will need $10,000 at the beginning of each of the four college years to pay for tuition and fees, and have some spending money. Ashley has made an arrangement with her father to do the household chores if her dad deposits $3,500 at the end of each year for the next 7 years in a bank account paying 8 percent interest. Assume the rate of interest stays at 8 percent during the college years.

Required:

1. What total amount of money is necessary at the start of Ashley's college career in order to pay $10,000 per year at the start of each of the four years?

2. Will there be enough money in the account for Ashley to pay for her college expenses if her father contributes $3,500 at the end of each of the next seven years?

Reference no: EM131094132

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Arrangement with her father to do the household chores

Reference no: EM131094132

Reference no: EM131094132

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