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A man wants to set up a 529 college savings account for his granddaughter. How much would he need to deposit each year into the account in order to have $50,000 saved up for when she goes to college in 17 years, assuming the account earns a 5% return?

Respuesta :

Answer:

1937.98

Step-by-step explanation:

In the given question, to find the value to be added per year we will use the formula

P= A. r/n/ (1 +r/n)ⁿ - 1

Here A = 50,000

r (rate of interest) = 5 % or 0.05.

n = 1

t = 17

P = value deposit per year

therefore, P = (50,000 X 0.05)/ (1 +0.05)¹⁷ - 1

P =   2500 / 2.29- 1

= 1937.98 $.

therefore, person has to deposit 1937.98 $ per month.

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