Smith plan to save $8,000 each of the next 35 years, and invest


Question Description:

30

Smith plan to save $8,000 each of the next 35 years, and invest that money in an account that pays 9% annual interest. In addition, he plan to pay for his child’s college education beginning in 20 years. Smith expect that education to cost $30,000 per year for four years. To pay for the education, he will simply withdrawal money from his investment account. In addition, a long-lost relative recently died, leaving his $50,000. A timeline depicting this situation follows. Date 0 1-19 20-23 23-35 Deposits $50,000 $8,000 $8,000 $8,000 Withdrawals $30,000 How much money will you have just after he make his last deposit 35 years from today?

Answer

30