okmarks People WindowHelp Secure I homeworkld 485037818&questionld-; 18lushed fa

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okmarks People WindowHelp Secure I homeworkld 485037818&questionld-; 18lushed false&cld; 4842281&centerw; SAM 3100 Online Spring 2017-2018 Abby Neff 1/27/18 131 AM Homework: Chapter 3 Homework Save Score: 0 of 1 pt 16 of 16/14 complete) Hw Score: 63.1%, 13.25 of 21 pt P 3-23 (similar to) Question Help * Your cousin is currenty 8 years old. She will be going to college in 10 years. Your aunt and uncle would ike to have $105,000 in a savings account to fund he educaton at tat tre the aocont promises to pay a tod interest rate of 45% per yua·how much morey do they need to put into the unt today to ensure that they will have $105,000 in 10 yearh? The amount they need to put away today is S(Round to the nearest cent .·s* 1.1 -fil:/ ". ;(KU) More Enter your aswer in the answer box and then click Check Answer All parts showing

Explanation / Answer

Cousin What your aunt and uncle want to know is what is the present value of $105,000 in 10 years, discounted at 4.5% annually. Most likely they do not think of this decision in these terms and do not use or understand this terminology. Execute: PV = 105000 / (1.045)^10 = 67612.42 PV $67,612.41 PV(4.5%,10,0,-105000)

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