What annual interest rate did your parents earn on the


To complete your last year in business school and then go through law school, you will need to withdraw $5,400 per quarter starting today. You anticipate that you will need to make these withdrawals for 20 total quarters (including todays withdrawal) and that you will be able to earn 4% annual interest on any money in your account between now and graduation from law school. When you graduate from law school, you will be debt free- but you will also have used all of your savings. Fortunately, your parents were prudent in saving for your education, they put $500 a month at the end of each month into a savings account for the last 10 years. What annual interest rate did your parents earn on the money they put into your savings account to allow all this to occur?

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Financial Management: What annual interest rate did your parents earn on the
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