Reference no: EM131839785

Your parents start saving for your sister's college education. She is 10 years old and will begin college when she turns age 18. She will need $4,000 at that time and at the end of each of the following 3 years. They will make a deposit at the end of this month in an account which pays 6 percent APR compounded monthly, and an identical deposit at the end of each month with the last deposit occurring when she turns age 18. What is the required monthly deposit which will allow them to reach their goal? 2. As the winning contestant in a television game show, you are considering the prizes to be awarded. You must indicate to the sponsor which of the following two choices you prefer, assuming you want to maximize your wealth. Assume it is now January 1, and there is no danger whatever that the sponsor won't pay off. (1) $1,300 now and another $1,300 at the beginning of each of the 11 subsequent months during the remainder of the year, to be deposited in an account paying 12 percent simple annual rate, but compounded monthly (to be left on deposit for the year). (2) $15,000 now. Which one would you choose?