In Order to Send Your First Child to Law School

question 119

Essay

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?

• A)You want to deposit an equal amount at the end of each year?
• B)You want to deposit one large lump sum today?

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Definitions:

Meter Reading

The process of recording the amount of electricity, gas, water, or other utilities consumed by a household or business.

Thousand Cubic Feet

A unit of measure used primarily in the United States for volume, often in reference to the consumption or production of natural gas.

Natural Gas

A fossil fuel used as a source of energy for heating, cooking, and electricity generation, composed mostly of methane.

Mcf

A standard measurement of natural gas volume, equivalent to 1,000 cubic feet.