Deposit an equal annual contribution to the college fund

Assignment Help Financial Management

Reference no: EM13872054

A child is born this year. On it's first birthday [after 1 year], the parents decide to deposit an equal annual contribution to the college fund that will earn 8%, compounded annually. How much should they deposit at the end of each year so that it will grow to $50,000 on the child's 18th birthday? (Please give explanation & how to calculate)

Reference no: EM13872054

Questions Cloud

Debt management and profit ability and market value ratios : Rank in order according to logical and practical framework, these ratios in terms of significance: liquidity, asset management, debt management, profit ability and market value ratios.

What is the estimated raw materials inventory balance : Morganton Company makes one product and it provided the following information to help prepare the master budget for its first four months of operations: The budgeted selling price per unit is $65. Budgeted unit sales for June, July, August, and Septe..

Debt to assets and debt to equity ratios : Calculate xyz corps net profit margin, debt to assets and debt to equity ratios for the following info: Sales/total assets ratio = 1.8 ROA = 3.5% ROE = 6.0%

Increase the length of time company will extend credit : Which one of the following will tend to increase the length of time a company will extend credit?

Deposit an equal annual contribution to the college fund : A child is born this year. On it's first birthday [after 1 year], the parents decide to deposit an equal annual contribution to the college fund that will earn 8%, compounded annually. How much should they deposit at the end of each year so that it w..

Unexpected increase in firms accounts receivable period : Which one of the following would tend to create an unexpected increase in a firm's accounts receivable period?

Interest-only and the balance of the loan : You have just borrowed $235,000 using a 1/1 ARM where payments for the first year are interest-only and the balance of the loan is fully amortized over the remaining 29 years. If you expect the yield on the 1-year LIBOR to be 4% one year from now, wh..

Under what circumstances are stocks less risky than bonds : Under what circumstances are stocks less risky than bonds?

Calculate the npv of the project using the apv method : A firm has decided to replace a major piece of industrial equipment. The equipment costs $690,000 to purchase and install and is expected to have a useful life of 5 years, after which it will be sold on the open market and is expected to have a salva..

User Account

All Pages