Describe the steps that you use to solve the problem

Reference no: EM131963972

Question: A couple has decided to start a college educational trust fund for their new born child. Suppose a couple made a deposited an initial $1,000 into the account on the child's actual day of birth and then on each subsequent birthdays, they made a deposited $5,000 into the account for the first 10 years. After the tenth year, the couple stopped depositing money into the account. When the child goes off to college, the trust fund will pay her R dollars on her 18^th, 19^th, 20^th, 21^st, and 22^nd birthday. Use the TVM solver to help determine the value of R if the money earns 2.15% interest compounded annually. Show in detail how you arrived at your answer. Your final answer should be in the form of a sentence. Write short comments in your solution that describe the steps that you use to solve this problem.

Reference no: EM131963972

Questions Cloud

What is the after-tax cost of debt in given case : The coupon rate on a debt issue is 8%. If the yield to maturity on the debt is 9%, what is the after-tax cost of debt in the weighted average cost of capital.

How much amount of loan will receive : A couple wishes to borrow money using the equity in their homo for collators! A loan company wilt loan them up to 70% of their equity.

Who is the decision-maker in the given case study : Who is (are) the decision-maker(s) in this case study (1). What is the moral dilemma (the two sides) in this case study? [2-3 sentences].

Find the market value of the bonds using semiannual analysis : Cox Media Corporation pays a coupon rate of 9 percent on debentures that are due in 25 years. The current yield to maturity on bonds of similar risk.

Describe the steps that you use to solve the problem : A couple has decided to start a college educational trust fund for their new born child. Suppose a couple made a deposited an initial $1,000 into the account.

How much the couple need to pay per year : The couple had just purchased a house for $615,000 which they finance with 80% mortgage from TSB at 5.35% p.a. interest for a repayment period of 25 years.

What would happen in case north korea threatened : In case the US has taken a pre-emptive action by being the first to start a nuclear war on north korea after north korea's threat.

State that the daily dietary supplement will not help : The sample evidence determines that we should reject the null hypothesis. What is the conclusion?

What is your opinion on the state of the sitcom today : What is your opinion on the state of the sitcom today? Do you think there is a current sitcom that will (like Lucy) still be viewed decades into the future?

User Account

All Pages