Question

At the time of the birth of a child, a parent wants to begin a
college fund that will grow to $40000 by the child's
18^{th} birthday. Interest is compounded continuously at
6.5%. What should the initial investment (P_{0}) be?

Answer #1

A couple with a newborn daughter wants to save for their
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What sum of money must be set aside at a child's birth to
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Today is your birthday and you decide to start saving for
college. You will begin college on your 18th birthday and will need
$10,000 per year at the end of each of the next 4 years (after that
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The terms of a single parent's will indicate that a child will
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A couple wishes to establish a college fund at a bank for their
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A parent is now planning a savings program to put a daughter
through college. She is 13 and plans to enroll in college in 5
years, and she should graduate 4 years later. Currently, the annual
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year. The college requires that the costs be paid at the start
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A father wants to invest a sum of money (P) into an account
today (at time 0), on his son’s birth, so that the son can
withdraw 10,000 TL at the start of
each of 18th, 19th, 20th, and
21st year birthday to cover his college
expenses for 4 years. How much should the father invest into the
bank now if the bank pays 12% per year?
(Draw the cash flow and show all solutions).
30,375
TL
b) 5,425
TL ...

A parent is now planning a savings program to put a daughter
through college. She is 13 and plans to enroll in college in 5
years, and she should graduate 4 years later. Currently, the annual
cost for college is $15,000 and is expected to increase 4% each
year. The college requires that the costs be paid at the start
(hint: beginning) of each year. The child now has $7,500 saved for
college in an account and is expected to...

1. To save for college, parents of a newborn child invest
$12,000 in a mutual fund at 10% interest, compounded semiannually,
how much money will be in the account when the child is 18 years
old? Round to the nearest cent.
2. Find out how long it takes a $2500 investment to double if it
is invested at 7% compounded quarterly. Round to the nearest tenth
of a year.

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