Johnrsquos parents started a college fund earning 8, Ask an Expert

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John’s parents started a college fund earning 8% (compounded annually) on the day he was born in1990 (time 0, when John was born). They deposited $1,500 on his birthday each year until he turned 5, after that they began depositing $4,000 annually until he turned 18. When he was 16 he wanted to buy a car. Knowing that John’s college fund would need a balance of at least $100,000 when he started college, at the age of 18, how much did John’s parents allow him to withdraw from the fund to purchase his car?

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Financial Management, Finance

Category:- Financial Management
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