Annuity surrounded by an annuity?
Ken and Barbie enjoy a year old, and want to amass for ps. education surrounded by an RESP. The child at the age of 18 will heed 2,500 each quarter for 5 years formation when the RESP matures? How much must be deposited at the shutting of every 6 months if money can earn 8.5%, compounded semi-annually.
It looks like 2 question in one, gratitude in finance!
What would own to come about to...
Answers: Assuming that the first payment is made at the child's first birthday, and the first dividend is rewarded on the child's 18th birthday (payments stop, last investment at age 17.5, total of 20 payments of $2,500), your answer is $649.45.
Let me know if you call for to change the parameter from the way I interpreted your press (i.e. Final investment and simultaneous withdrawal on 18th b-day, more than 20 withdrawls, etc.). Also, I averaged the balance during the payout period to multiply the semi-annual compounding, since you had a debt in the middle of respectively period.
Good luck!
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