Assume that your parents wanted to have $70,000 saved for college by your 18th b

Question

Assume that your parents wanted to have $70,000 saved for college by your 18th birthday and they started saving on your first birthday. They saved the same amount each year on your birthday and earned 12.0% per year on their investments. How much would they have to save each year to reach their goal? b. if they think you will ake five years Instead of four to graduate and decide to have $110,000 saved just in case, how much would they have to save each year to reach thoir new goal? a. How much would they have to save each year to reach their goal? To reach the gpoal of 70,000,the amount they have to save each year is S(Round to the nearest cent.)

Explanation / Answer

1.
Using financial calculator:
N=18
I/Y=12%
FV=70000
PV=0
CPT PMT=1255.61

2.
Using financial calculator:
N=18
I/Y=12%
FV=110000
PV=0
CPT PMT=1973.10

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