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How much must Xi deposit today

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Question - Xi is planning for his son's college education to begin ten years from today. He estimates the yearly tuition, books, and living expenses to be $20,000 per year for a four-year degree (given his son is taking the fixed tuition plan). How much must Xi deposit today, at an interest rate of 7 percent, for his son to be able to withdraw $20,000 per year (at the beginning of the year) for four years of college? Hint: First payment on Year 10.

a. $12,880.45

b. $20,509.91

c. $40,000.00

d. $36,848.37

e. $34,651.06

Reference no: EM132828180

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