Contemporary Engineering Economics 6th Edition by Chan Park

Exercise 35

On the day his baby is born, a father decides to establish a savings account for the child's college education. Any money that is put into the account will earn an interest rate of 8% compounded annually. The father will make a series of annual deposits in equal amounts on each of his child's birthdays from the 1st through the 18th, so that the child can make four annual withdrawals from the account in the amount of $30,000 on each birthday. Assuming that the first withdrawal will be made on the child's 18th birthday, which of the following equations are correctly used to calculate the required annual deposit
(a) A = ($30,000 × 4)/18
(b) A = $30,000( F / A ,8%,4)
× ( P / F , 8%, 21)( A / P , 8%, 18)
(c) A = $30,000( P /A, 8%, 18)
× ( F / P ,8%,21)( A / F ,8%,4)
(d) A = [$30,000( P / A ,8%,3) +
$30,000] ( A / F , 8%, 18)
(e) A = $30,000[ ( P / F , 8%, 18) +
( P/F, 8%, 19) + (F/F, 8%, 20) +
(P/F, 8%, 21)](A/P, 8%, 18)