## anonymous one year ago A parent on the day the child is born wishes to determine what lump sum would have to be paid into an account bearing interest at 5% compounded annually, in order to withdraw P20,000 each on the child’s 18th, 19th, 20th and 21st birthdays. How much is the lump sum amount? Help please

1. anonymous

@mathmate

2. anonymous

@ganeshie8

3. anonymous

@Preetha

4. anonymous

@.

5. anonymous

@.Sam.

6. IrishBoy123

discount those payments back at 5% to today. ie calculate their present values at 5%. so you will have $$\huge \Sigma_{n=18}^{21} \frac{20} {(1+5\%)^n }$$

7. mathmate

@irishboy123 nice!