How much should the initial deposit be

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A couple just welcomed the birth of their new child and decides to set up a an interest-bearing account for the child’s college tuition. They hope to save $100,000 by the time the child enters college. The goal is deposit some amount A1 at the end of the first year and continue to contribute at the end of the year for a total of 17 years. Given that they plan to increase their contribution each year by 3% and that the account will earn 6% compound interest, how much should the initial deposit be?

Reference no: EM131003075

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