Answered

At Westonci.ca, we provide clear, reliable answers to all your questions. Join our vibrant community and get the solutions you need. Get detailed answers to your questions from a community of experts dedicated to providing accurate information. Connect with a community of professionals ready to help you find accurate solutions to your questions quickly and efficiently.

Gary's parents want him to attend The University of Houston. They opened a college savings account 15 years ago. Today, average yearly tuition and fees for one year at the university are about $10,350. Based on this information, about how much should Gary's parents have saved each of the 15 years to cover the cost of 4 years at The University of Houston?

Sagot :

facundobuzzetti

Answer:

Results are below.

Step-by-step explanation:

Giving the following information:

Today, average yearly tuition and fees for one year at the university are about $10,350.

I will assume a yearly interest rate of 8%.

First, we need to calculate the total amount needed:

Future value (FV)= 10,350*4= $41,400

Now, using the following formula, the annual deposit required:

FV= {A*[(1+i)^n-1]}/i

A= annual deposit

Isolating A:

A= (FV*i)/{[(1+i)^n]-1}

A= (41,400*0.08) / [(1.08^15) - 1]

A= $7,194.22

We hope our answers were helpful. Return anytime for more information and answers to any other questions you may have. We hope this was helpful. Please come back whenever you need more information or answers to your queries. Westonci.ca is committed to providing accurate answers. Come back soon for more trustworthy information.