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From the time Jane and John’s daughter was born, they decided to save for her university...

From the time Jane and John’s daughter was born, they decided to save for her university education. Jane and John assume their daughter will require $1000 per month for her four years of study, payments being made at the beginning of each month. If Jane and John save for 18 years, calculate the amount they must save at the beginning of each month. Assume 6% p.a. interest is compounded monthly. Hint: there are two annuities here, calculate the lump sum required to fund the $1000 p.m. allowance first, then the monthly amount the parents must save.

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