In 18 years you want to have 25000 in a college fund If the

In 18 years you want to have 25000 in a college fund. If the tuition earns 4.45% compounded semiannually what amount should you deposit at the beginning of each 6 months?

Future value = 25000

Maturity = 18 years

Semi annual interest rate = 4.45%/2 = 2.225%

Total maturity in 6 months periods = 18*2 = 36 periods

Let the amount to be deposited every 6 months is X.

Formula for future value:

25000 = X/2.225%[(1+0.02225)^36 - 1]

25000*2.225% = X*1.2082

556.25 = 1.2082X

X = 556.25/1.2082 = 460.4

Amount to be deposited at the beginning of each 6 months = 460.4

In 18 years you want to have 25000 in a college fund. If the tuition earns 4.45% compounded semiannually what amount should you deposit at the beginning of each

In 18 years you want to have 25000 in a college fund If the

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