The effective monthly interest rate earned on their savings


Suppose your parents have decided that after you graduate at the end of this year, they will start saving money to help pay for your younger brother to attend college. They plan to save money for 5 years before he starts college and to save during his college years. They plan to contribute $4,000 per year at the start of each of his 4 college years. Your parents will thus make monthly payments for 8 years,S prior to and 3 during your brother's college education. The effective monthly interest rate earned on their savings is .45%. How much must the monthly savings be under these conditions?

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Finance Basics: The effective monthly interest rate earned on their savings
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