In Order to Send Your First Child to Law School

question 25

Short Answer

In order to send your first child to Law School when the time comes,you want to accumulate $40,000 at the end of 18 years.Assuming that your savings account will pay 6% compounded annually,how much would you have to deposit if:
a.you want to deposit an equal amount at the end of each year?
b.you want to deposit one large lump sum today?

---

Definitions:

Federal Reserve

The central banking system of the United States, responsible for monetary policy, regulating banks, maintaining financial stability, and providing banking services to governmental institutions.

Board of Governors

The Federal Reserve System’s governing body.

Federal Open Market Committee

A branch of the Federal Reserve that oversees open market operations, including the buying and selling of government securities, to influence the money supply and interest rates.

Open Market Operations

The buying and selling of government securities by a central bank to control the money supply and interest rates in the economy.