Answer Happy

A couple is planning to finance their 3-year-old son's university education They are establishing an RESP that is projected to earn 4.50% as a stated annualized rate. a) What annual deposit must be made starting today on the son's 3rd birthday and continuing to his 16th birthday in order to meet the future university expense(shown below)? b) What monthly deposit starting today and continuing to his 16th birthday would be required to meet those expenses? The following amounts are presumed to be withdrawn on the stated birthday to pay that years expenses. Moneys remaining in the account past the 16th birthday are presumed to be compounding annually. When the last withdrawal is made the account is presumed empty, zero, Nada, caput!! To assist with your planning you may want to sketch an accurate cash-flow diagram, or account balance diagram. birthday 18th 19th 20th 21st expense $28,000 $30,000 $31,000 $33,000 He will be paying his own way if he doesn't get his degree in 4 years!!!!