00:01
Okay, so for this one, we have a father that wants to know how much money he should put into an account on the day his son is born with an interest rate of 12 % per year to provide withdrawals of $2 ,000 on his son's 18th, 19th, 20th, and 21st birthday.
00:22
So throughout this question, we're going to use a rate of 12 % and our withdrawal.
00:32
Of $2 ,000 and we're going to do it over a period of four years.
00:36
So we're going to put these numbers into this equation here, which is going to represent the money that the father needs after 17 years.
00:49
So when we do that, we get here.
00:52
We use the number four for our end because it's over a period of four years.
00:58
And here our a is going to be 2000.
01:02
When we do that, we're going to wind up with the answer of, we're going to wind up with the answer of $6 ,000, $7 ,74, and $64 .60.
01:27
So now that we have the amount of money that he's going to need at the end of it 17 years, we need to find how much he needs to deposit...