Ken and Belinda have two children, aged 3 and 6. At the end of every six months for the next 12½ years, they wish to contribute equal amounts to a Registered Education Savings Plan (RESP). Six months after the last RESP contribution, the first of 12 semi-annual withdrawals of $5,000 will be made. If the RESP earns 8.5% compounded semi-annually, what must be the size of their regular RESP contributions?

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The Answer of Ken and Belinda have two children, aged 3 and 6. At the end of every six months for the next 12½ years, they wish to contribute equal amounts to a Registered Education Savings Plan (RESP). Six months after the last RESP contribution, the first of 12 semi-annual withdrawals of $5,000 will be made. If the RESP earns 8.5% compounded semi-annually, what must be the size of their regular RESP contributions?

Ken and Belinda Have Two Children, Aged 3 and 6