Assume that you are planning for your child’s education. You would like to make equal savings deposits at the end of each year (Years 1 through 21, a total of 21 deposits) so that your child may make withdrawals at the end of each of the years 18 through 21 for tuition. Tuition is currently $2,000, but it is expected to grow at an annually compounded rate of 5% for each of the next 10 years, then at 6% for each of the years 11 through 25. If you can earn a nominal annual rate of 8%, but interest is compounded quarterly, then how much must you deposit in each year?
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