Your younger sister, Linda, will start college in five years. She has just informed your parents...

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Your younger sister, Linda, will start college in five years. She has just informed your parents that she wants to go to Hamp

business finance

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Answer 1

Answer #1

Amount to be saved each year

$4,072.92

Total Amount required after 5 years

Using financial calculator

Input:I/Y=10, N=4,PMT=-36000

Solve for PV as $114,115.16

Amount accumulated by 5600 contributions

Using financial calculator

Input: I/Y=10,N=10,PMT=-5600

Solve for FV= $89,249.58

Balance to be accumulated

= 114,115.16 -89,249.58 = $24,865.58

Amount to be saved each year

Using financial calculator

Input: I/Y=10, N=5,FV=-24,865.58

Solve for PMT as $4,072.92

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Answer 2

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