Aunt darla has agreed to deposit a lump sum into an account

Reference no: EM13484803

Aunt Darla has agreed to deposit a lump sum into an account that pays 12% interest compounded annually in order to pay for her niece's college education. The niece estimated that she will need to withdraw $40,000 at the beginning of each year for four years to pay for room, board, tuition, and books. Aunt Darla will deposit the lump sum on August 1, 2014, and the niece will make the first withdrawal on August 1, 2020.

Required:

Determine the amount that Aunt Darla must deposit. Clearly label all work.

Reference no: EM13484803

Questions Cloud

Is it possible for your voting interest in a firm to : is it possible for your voting interest in a firm to increase without your having to purchase additional shares in that

Time value comparisons of single amounts-in exchange for a : time value comparisons of single amounts-in exchange for a 20000 payment today a well known company will allow you to

If a bank finds that its roe is too low because it has too : if a bank finds that its roe is too low because it has too much bank capital what can it do to raise is

How do you think the efficient-markets hypothesis should : how do you think the efficient-markets hypothesis should impact upon the drafting of accounting standards? bear in mind

Aunt darla has agreed to deposit a lump sum into an account : aunt darla has agreed to deposit a lump sum into an account that pays 12 interest compounded annually in order to pay

How are accounting numbers used to monitor this agency : a retail company begins operations late in 2000 by purchasing 600000 of merchandise.there are no sales in 2000. during

Good internal controls are essential for effective and : good internal controls are essential for effective and efficient operations of an enterprise. the downside is excessive

How might a sudden increase in peoples expectations of : how might a sudden increase in peoples expectations of future real estate prices affect interest

Would your answer be different in b if the productive : schopp inc. has been manufacturing its own shades for its table lamps. the company is currently operating at 100 of

User Account

All Pages