IE 150 Problem Set 7 Annuities and Gradients Instructions: • Write/Type/Print your answers on yellow pad or bond paper (NO A4’s). Use a different sheet per problem. • Use phrases to describe what you are doing. Do not present it as just a series of equations and numbers. • Label each step. Ex: “Step 1: Set-up the Total Revenue Equation”, “Step 4: Solve for the NPV”. • Box the final answers. • Use clear formatting: Indent at each step. Show your answers in just 1 column. (The problem set will be read from top to bottom, and not top bottom diagonal right bottom.) Problem 1: Suppose that you want to start investing for your son’s college education, which is estimated to be at 150,000 per year. How much money should you invest every year from now to the time he is born? Assume that you will find a way to make your money grow at 10% per year.
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