Question

When Raisel's son was born, she put $7,500 in an investment that earns 5.25% compounded quarterly. This investment will mature when her son turns 18 and will go straight into an annuity at 7.25% compounded and paying out monthly at the end of the period. The investment was to help pay for his 4-years of college. Find the size of these monthly payments received by Raisel's son during his college stay.

Answer 1

just change the appropriate numbers in the posting

http://www.jiskha.com/display.cgi?id=1270952022

They are the same question.

Answer 2

at age 18:
the amount of the investment = the present value of the annuity

6500(1.019375)^72 = x(1-0.0725/12^-48)/(0.0450/4)
19,177.84 = x(41.55860953)
x=461.46

is dis correct!!!

Answer 3

oh no...i mixed the queston
sry...ill try again!! oops

Answer 4

7500(1.013125)^72 = x(1-.0725/12^-48)/(.0725/12
19177.84 = x(41.55860953)
461.46 = x

is dis correct??

Answer 5

I got the same result to the penny!

good job!