Unformatted text preview: ecide to make deposits into an educational savings account on each of their daughterʹs birthdays, starting with her first birthday. Assume that the educational savings account will return a constant 7%. The parents deposit $2000 on their daughterʹs first birthday and plan to increase the size of their deposits by 5% each year. Assuming that the parents have already made the deposit for their daughterʹs 18th birthday, then the amount available for the daughterʹs college expenses on her 18th birthday is closest to: A) $42,825 B) $97,331 C) $67,998 D) $103,063 Assume that you are 30 years old today, and that you are planning on retirement at age 65. Your current salary is $45,000 and you expect your salary to increase at a rate of 5% per year as long as you work. To save for your retirement, you plan on making annual contributions to a retirement account. Your first contribution will be made on your 31st birthday and will be 8% of this yearʹs salary. Likewise, you expect to deposit 8% of your salary each year...
View Full Document
This note was uploaded on 11/27/2013 for the course FINA 5170 taught by Professor Staff during the Fall '08 term at North Texas.
- Fall '08