Lormor 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. Lormor expect that education to cost $30,000 per year for four years. To pay for the education, he will simply withdrawal money from your investment account. In addition, a long-lost relative recently died, leaving you $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 he have just after you make your last deposit 35 years from today?