A man wants to set up a 529 college savings account for his granddaughter. How much would he need to deposit each year into the account in order to have $50,000 saved up for when she goes to college in 17 years, assuming the account earns a 5% return.

Annual deposit= $1,621.26

Explanation:

Giving the following information:

FV= $50,000

Number of years= 17

Interest rate= 5%

To calculate the annual deposit required to reach the objective, we need to use the following formula:

FV= {A*[(1+i)^n-1]}/i

A= annual deposit

Isolating A:

A= (FV*i)/{[(1+i)^n]-1}

A= (50,000*0.07) / [(1.07^17)-1]

A= $1,621.26

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