Assume that your parents wanted to have $ 180 comma 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 10.0 % per year on their investments. a. How much would they have to save each year to reach their goal? b. If they think you will take five years instead of four to graduate and decide to have $ 220 comma 000 saved just in case, how much would they have to save each year to reach their new goal?

b. If they think you will take five years instead of four to graduate and decide to have $ 220 comma 000 saved just in case, how much would they have to save each year to reach their new goal?

48246,48

Explanation:

FVOrdinary Annuity=C*(1+i)n-1/i

ANNUiTY=(180000)/(1+10%)>18/10%

Annuty 2000000 1,10

45,59917313 5,559917313

43860,44444

Monthly % N Monthly % VF

43860,44444 1,10 17 43860,44444 5,05 221.691,31

43860,44444 1,10 16 43860,44444 4,59 201.537,56

43860,44444 1,10 15 43860,44444 4,18 183.215,96

43860,44444 1,10 14 43860,44444 3,80 166.559,96

43860,44444 1,10 13 43860,44444 3,45 151.418,15

43860,44444 1,10 12 43860,44444 3,14 137.652,86

43860,44444 1,10 11 43860,44444 2,85 125.138,97

43860,44444 1,10 10 43860,44444 2,59 113.762,70

43860,44444 1,10 9 43860,44444 2,36 103.420,63

43860,44444 1,10 8 43860,44444 2,14 94.018,76

43860,44444 1,10 7 43860,44444 1,95 85.471,60

43860,44444 1,10 6 43860,44444 1,77 77.701,45

43860,44444 1,10 5 43860,44444 1,61 70.637,68

43860,44444 1,10 4 43860,44444 1,46 64.216,08

43860,44444 1,10 3 43860,44444 1,33 58.378,25

43860,44444 1,10 2 43860,44444 1,21 53.071,14

43860,44444 1,10 1 43860,44444 1,10 48.246,49

43860,44444 1,10 0 43860,44444 1,00 43.860,44

2000000

FVOrdinary Annuity=C*(1+i)n-1/i

ANNUiTY=(180000)/(1+10%)>18/10%

Annuty 2200000

45,59917313

48246,48889