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What is the value of the first deposit

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On the day his baby was born, a father decided to establish a savings account for the child's university education. The father will make a series of annual deposits on each of his child's birthdays, the deposits growing at 6% annually, from the 1st (at t=1) through to the 18th (t=18) birthday. This will need to be sufficient so that the child can withdraw $3000 on his 18th birthday, $3300 on his 19th birthday, $3600 on his 20th birthday, and so on (growing at $300 per year) until (and including) his 30th birthday.

Note: this is 13 withdrawals overall (including the first one on the 18th birthday).

What is the value of the first deposit (when the baby turns one)? The interest rate is 8%.

Reference no: EM132577113

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