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Calculating Required Annual Deposit for College Savings, Exercises of Mathematics

Document containing solved mathematics

Typology: Exercises

2021/2022

Uploaded on 07/17/2023

rododer738
rododer738 🇮🇳

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Question:
Click Here (https://www.chegg.com/homework-help/questions-and-answers/father-decides-
establish-savings-account-child-s-college-education-first-birthday-son-mone-q117349933)
Step 1 of 2
To calculate the required annual deposit A, we can use the formula for
the future value of an annuity.
Future Value =
Where:
A = Annual Deposit
r = Interest Rate per period
n = Number of periods
Explanation
In this case, the interest rate is 10% per year, compounded annually. The
number of periods is 18 (from the 2nd birthday to the 19th birthday).
Step 2 of 2
Using the formula, we can set up the equation:
Now we can solve for A:
A=548.26
Final Answer
Therefore, the required annual deposit A is approximately $548.26

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Question:

Click Here (https://www.chegg.com/homework-help/questions-and-answers/father-decides- establish-savings-account-child-s-college-education-first-birthday-son-mone-q117349933)

Step 1 of 2

To calculate the required annual deposit A, we can use the formula for the future value of an annuity. Future Value = Where: A = Annual Deposit r = Interest Rate per period n = Number of periods

Explanation

In this case, the interest rate is 10% per year, compounded annually. The number of periods is 18 (from the 2nd birthday to the 19th birthday).

Step 2 of 2

Using the formula, we can set up the equation:

Now we can solve for A: A=548.

Final Answer

Therefore, the required annual deposit A is approximately $548.