13. PAYING FOR COLLEGE Tom Potter estimates that his daughter's college needs, begin- ning in 8 years, will be $3600 at the end of each quarter for 4 years. (a) Find the total amount needed in 8 years assuming 8% compounded quarterly. (b) Will he have enough money available in 8 years if he invests $700 at the end of each quarter for the next years at 8% compounded quarterly?

Q: A newborn child receives a $4,000 gift toward a college education from her grandparents. How much…

A: The time value of money helps investors to take investment decisions based on present value, future…

Q: Ethan wants to set up a fund for his son's education such that he could withdraw $2,982.00 at the…

A: Quarterly withdrawals (P) = $2,982.00 Period = 6 Years Quarterly period (n) = 6*4 = 24 Interest rate…

Q: Lisa plans to invest $300 each month for the next 17 years in a 529 account for Zach starting next…

A: Monthly deposit = $300 Period of monthly deposits = 17 years Additional amount at the end of Year 10…

Q: 5) Planning for their child's college education, Sean and Jessica opened an account paying 8.00%…

A: Given: PMT = $15,000.00 (ordinary annuity payment per year) r = 8.00% compounded yearly, which is…

Q: Assume the total cost of a college education will be $300,000 when your child enters college in 18…

A: Future Value = Present Value * ( 1 + Interest rate)time period

Q: Assume the total cost of a college education will be $300,000 when your child enters college in 18…

A: Value of money declines with the time. Compounding and discounting are two techniques to consider…

Q: You are going to save money for your son’s education. You have decided to place $4,146 every half…

A: Variables in the question:Deposit (PMT)=$4146Rate=9.51% p.a.Semi-annual rate==4.755%N=3 yearsnper=3…

Q: Elizabeth has $31,209.00 in an investment account. Her goal is to have the account grow to…

A: The concept of TVM refers to the interest-earning capacity of money because money earned earlier is…

Q: First 30 Years PV 0 Next 25 Years PV 11.049 FV 98 0250.94 FV 0 Periods Rate 30 7.6% years Periods 25…

A: We need to break this question in to 2. In the first part we are going to determine the value of the…

Q: What is the amount of money you would need to invest per month over 18 years at 3% interest…

A: The monthly investment over 18 years is equal to the total cost of $44,672. It is assumed that the…

Q: Assume the total cost of a university education will be $90,000 when your child enters university in…

A: Compound = Monthly = 12Future Value = fv = $90,000Time = t = 6 * 12 = 72Present Value = pv = $55,000

Q: 11. Mr. and Mrs. Nash planned to make 16 identical yearly payments to fund the college education of…

A: Two unrelated question appear on the screen. They have multiple sub parts as well. All the sub parts…

Q: Bradley Snap has deposited $7 000 in a guaranteed investment account with a promised rate of 6%…

A: concept. Future value = A ( 1+r )n where , A= amount deposited r= interest rate n= time period.

Q: 8Assume that the cost of a college education will be $20,000 per year when your child enters college…

A: Annual cost = $20,000Number of years in college = 4 years Number of years =12 yearsCollege expenses…

Q: Nathan and Stephanie are saving for their daughter's college education. Their daughter, Paige, is…

A: The present value analysis is used to find out the profitability of a project. It uses the concept…

Q: Assume the total cost of a college education will be $224,140 when your child enters college in 12…

A: annual rate of interest refers to the rate which is charged by the lender from the borrowed on the…

Q: Your son Tommy was just born today (Year 0), and you are planning for his college education. You…

A: Periodic deposit refers to an amount that is deposited at every period for the repayment of a loan…

Q: You need P4,000 per year for four years to go to college. Your father invested P5, 000 in 7% account…

A: Initial deposit (D) = P 5000 Withdrawal in year 17 (W1) = P 4000 Withdrawal in year 18 (W2) = P 4000…

Q: What lump sum do parents need to deposit in an account earning 11%, compounded monthly, so that it…

A: Solution:- When an amount is invested somewhere, it earns interest on it. The amount initially…

Q: Suppose an individual wants to have $200,000 available for her child's education. Find the amount…

A: The concept of time value of money will be used here. As per the concept of time value of money any…

Q: Abe will need $12,000 per year for four years to pay for tuition. How much will Abe's parents have…

A: The present worth of the future estimated spending each year will be found by using the PV formula…

Q: mulate enough f

A: At the end of each year starting from the year 18,  Given The first FV must be received at year 18,…

Q: Professor Dom wishes to set up a permanent scholarship paying $5,000 per annum, at the beginning of…

A: To determine Present value(PV) from the Future value(FV) , discounting is required.

Q: Revere College predicts that in 6 years it will take $150,000 to attend the college for four years.…

A: Given information: Future value is $150,000 APR is 7% Number of years is 6

Q: Net income Shares outstanding Stock price Pfizer Merck $ 9,616 $ 7,067 5,580 2,530 $ 36.41 $ 81.09…

A: The question asks about calculating the total asset turnover for a firm, given certain financial…

Q: nd wants to save the college tuition fees his child will need in ten years by starting with a…

A: Future value of the amount is that amount being deposited and amount of compounded interest…

Q: Revere College predicts that in 18 years it will take $200,000 to attend the college for four years.…

A: Present Value  = Future value / (1+rate)^n Where, Future Value = $200000 n = 18*12 = 216 r= 9%…

Q: A family wants to have a $130,000 college fund for their children at the end of 19 years. What…

A: This pertains to the concept of time value of money. Amount deposited periodically is an annuity.

Q: You are doing a special project for the boss and he is going to give you a $5,000 bonus when it is…

A: When you put money in bank accounts than money growth with time due to compounding of interest and…

Q: A family want to have a $213,000.00 higher education fund for their children at the end of 19 years.…

A: An annuity refers to a payment series that is provided in exchange for a lump sum payment. It is…

Q: What lump sum do parents need to deposit in an account earning 10%, compounded monthly, so that it…

A: As per our guidelines we are supposed to answer only one question (if there are multiple questions…

Q: Elizabeth and William want to begin saving for their child's college education. They estimate that…

A: Amount required = $119,000Annual rate = 5%Number of years = 20 years

Risk and return

Before understanding the concept of Risk and Return in Financial Management, understanding the two-concept Risk and return individually is necessary. 

Capital Asset Pricing Model

Capital asset pricing model, also known as CAPM, shows the relationship between the expected return of the investment and the market at risk. This concept is basically used particularly in the case of stocks or shares. It is also used across finance for pricing assets that have higher risk identity and for evaluating the expected returns for the assets given the risk of those assets and also the cost of capital.