Solution-By how much do the yearly payments reduce

By how much do the yearly payments reduce

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Question - Pedro and Laura will have a baby in 3 months from now, and they have started to plan different financial aspects of their child's life. In this planning process, they are considering different options for the college tuition. These are some of the estimations they have:

-Their child will go to college exactly on his 18th birthday.

-They expect to have enough money saved to withdraw $4,000 every 4 months, at the beginning of every semester, for a 5-year career.They plan to save a fixed amount of money annually, adding money to an investment on their son's birthday, until 1 year before he starts college.

-How much money will they need to have in their investment account by their son's birthday, with a 10% compounded monthly return?

-How much money should they save each year at this interest rate?

-If Laura and Pedro plan to open the investment account now with an initial amount of $10,000, by how much do the yearly payments reduce?

Reference no: EM133012569

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By how much do the yearly payments reduce

Reference no: EM133012569

Reference no: EM133012569

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