Your daughter wants to the University of Cincinnati. She is already planning to start in 10 years (which is when her first tuition payment is due). Her tuition will be $19,886 per year for four years. The relevant discount rate is 8.01 percent per year. You plan to save for her education by setting aside the same amount of money per year for 9 years. What is the amount you need to save per year if you start saving at the end of this year? $32,914.10 $5,271.07 $3,657.12 $30,473.20 $7,316.70

Your daughter wants to the University of Cincinnati. She is already planning to start in 10 years (which is when her first tuition payment is due). Her tuition will be $19,886 per year for four years. The relevant discount rate is 8.01 percent per year. You plan to save for her education by setting aside the same amount of money per year for 9 years. What is the amount you need to save per year if you start saving at the end of this year? $32,914.10 $5,271.07 $3,657.12 $30,473.20 $7,316.70

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter5: The Time Value Of Money

Section: Chapter Questions

Problem 33P

See similar textbooks

Similar questions

You plan to send your first born child for a 4-year degree with 4 annual payments. Your first payment will start in 20 years in the amount of $65,000 and grow by 9% per year. Assuming a discount rate of 7%, how much do you need to set aside today to fund your child's education? Use the $ symbol and round to the nearest thousand dollars.
You plan to send your first born child to College for a 4-year degree with 4 annual payments. Your first payment will start in 18 years in the amount of $50,000 and grow by 15% per year. Assuming a discount rate of 6%, how much do you need to set aside today to fund your child's education? Use the $ symbol and round to the nearest thousand dollars. A correct answer would look like $34,000.
You plan to send your first born child to DePaul for a 4-year degree with 4 annual payments. Your first payment will start in 25 years in the amount of $ 58,982.71 and grow by 9% per year. Assuming a discount rate of 6%. You start saving in one year from now a fixed amount for 20 total deposits. What is the amount of that annual savings deposit in order to save enough to fund the education? Use the $ symbol and round to the nearest thousand dollars. A correct answer would look like $13,000.
Your parents say they will loan you $15,000 today for college. They would like to be repaid $21,000 at the end of 10 years. What is the annual yield they will receive?
You are saving for the graduation (4 years) of your two children. They are two years apartin age; one will begin university in 15 years from today, the other will begin in 17 yearsfrom today. You estimate your children’s university expenses to be $21,000 per year perchild. The annual interest rate is 15 percent. How much money must you deposit in anaccount each year to fund your children’s education? You will begin payments one yearfrom today. You will make your last deposit when your oldest child enters university.
You have recently adopted a child and are planning to save for her college education. You want to have $50,000 saved by the time she starts college in 18 years. If your savings account offers an annual interest rate of 3%, how much should you deposit each year in order to reach your goal?
You plan to start grad school in 5 years (at the end of year 5) and will graduate 3 years after you start. Tuition payments of $30,000 per year are due at the beginning of each school year. If you start saving, in equal annual amounts, at the end of this year untilone year before you start school, how much must you save each year to cover the tuition payments? Assume an interest rate of 4.5%
Your daughter will start college one year from today, at which time the first tuition payment of \$58,000$58,000 must be made. Assume that tuition does not increase over time and that your daughter remains in school for four years. How much money do you need today in your savings account, earning 5\%5% per annum, in order to make the tuition payments over the next four years, provided that you have to pay 35\%35% per annum in taxes on any earnings (e.g., interest on the savings)?
You estimate a college education will be $300,000 when your child enters college in 18years. You presently have $70,000 to invest. What annual rate of interest must you earn on yourinvestment to cover the cost of your child’s college education?
Your daughter is currently 10 years old. You anticipate that she will be going to college in 8 years. You would like to have $119,000 in a savings account to fund her education at that time. If the account promises to pay a fixed interest rate of 10% per year, how much money do you need to put into the account today to ensure that you will have $119,000 in 8 years? Your deposit today should be $. (Round to the nearest cent.)
Your son Tommy was just born today (Year 0), and you are plannjng for his college education. You would like to make equal depostis every 26 weeks into a college savings account starting in Year 1 and ending in Year 21 (41 deposits), so that Tommy can make annual withdrawala in Year 18, 19, 20, and 21 for tuition. Tuition is currently (Year 0) $2500/year, and it is expected to grow at 4%/year for each of the next 10 years, and then at 5%/year for all years after. You can earn a nominal annual rate or 8.45% with interest compounded weekly in a college savings account. How much must eaxh lf the 41 depostions be to exactly fund the expexted tuition expense?
Suppose that you are saving for college for a child. That child was just born and you will have to make 4 equal tuition payments over a four year period with the first occurring in exactly 18 years. Each successive tuition payment is made exactly a year after the prior payment. You also plan on buying this child a car in exactly 15 years using this same savings. You will pay $30,000 at that time for the car. You will be depositing money every year with the first check deposited into savings today and the last one the day the first tuition check is due. If you want to be able to pay $65,000 each year for tuition, how much do you have to save per year? Assume the discount rate is 10 percent per year.