46. Your younger sister, Brittany, will start college in five years. She has just informed your parents that she wants to go to Eastern State U., which will cost $30,000 per year for four years (costs assumed to come at the end of each year). Anticipating Brittany's ambitions, your parents started investing $5,000 per year five years ago and will continue to do so for five more years. How much more will your parents have to invest each year for the next five years to have the necessary funds for Brittany's education? Use 10 percent as the appropriate interest rate throughout this problem (for discounting or compounding). Round all values to whole numbers. 47. Brittany (from Problem 46) is now 18 years old (five years have passed), and she wants to get married instead of going to college. Your parents have accumulated the necessary funds for her education. Instead of funding her schooling, your parents are paying $10.000 for her current wedding and plan to take year-end vacations costing $3,000 per year for the next three years. Annuity consideration (LO4) Special considerations of annuities and time periods (LO4) How much money will your parents have at the end of three years to help you with graduate school, which you will start then? You plan to work on a master's and perhaps a PhD. If graduate school costs $32,600 per year, approximately how long will you be able to stay in school based on these funds? Use 10 percent as the appropriate interest rate throughout this problem. Round all values to whole numbers. Chapter 9 The Time Value of Money283b. How much interest will he pay over the life of the loan?How much should he be willing to pay to get out of a 12 percent mortgageand into a 10 percent mortgage with 30 years remaining on the mortgage?Suggestion: Find the annual savings and then discount them back to thepresent at the current interest rate (10 percent).с.45. You are chairperson of the investment fund for the Continental Soccer League.You are asked to set up a fund of semiannual payments to be compoundedsemiannually to accumulate a sumannual rate (20 payments). The first payment into the fund is to take place sixmonths from today, and the last payment is to take place at the end of the 10thAnnuity withchanging interest$200,000 after 10 years at an 8 percentrates(LO4)year.Determine how much the semiannual payment should be. (Round to wholeа.numbers.)On the day after the sixth payment is made (the beginning of the fourthyear) the interest rate goes up to a 10 percent annual rate, and you can earn a10 percent annual rate on funds that have been accumulated as well as all futurepayments into the fund. Interest is to be compounded semiannually on all funds.b.Determine how much the revised semiannual payments should be after thisrate change (there are 14 payments and compounding dates). The nextpayment will be in the middle of the fourth year. (Round all values towhole numbers.)46. Your younger sister, Brittany, will start college in five years. She has justinformed your parents that she wants to go to Eastern State U., which will cost$30,000 per year for four years (costs assumed to come at the end of each year).Anticipating Brittany's ambitions, your parents started investing $5,000 peryear five years ago and will continue to do so for five more years.How much more will your parents have to invest each year for the nextfive years to have the necessary funds for Brittany's education? Use 10 percentas the appropriate interest rate throughout this problem (for discounting orcompounding). Round all values to whole numbers.Annuityconsideration(LO4)47. Brittany (from Problem 46) is now 18 years old (five years have passed),and she wants to get married instead of going to college. Your parents haveaccumulated the necessary funds for her education.Instead of funding her schooling, your parents are paying $10,000 for hercurrent wedding and plan to take year-end vacations costing $3,000 per year forthe next three years.Specialconsiderations ofannuities and timeperiods(LO4)How much money will your parents have at the end of three years to helpyou with graduate school, which you will start then? You plan to work on amaster's and perhaps a PhD. If graduate school costs $32,600 per year,approximately how long will you be able to stay in school based on thesefunds? Use 10 percent as the appropriate interest rate throughout this problem.Round all values to whole numbers.www.mhhe.com/bhd14e 47. Brittany (from Problem 46) is now 18 years old (five years have passed),and she wants to get married instead of going to college. Your parents haveaccumulated the necessary funds for her education.Instead of funding her schooling, your parents are paying $10,000 for hercurrent wedding and plan to take year-end vacations costing $3,000 per year forthe next three years.Specialconsiderations ofannuities and timeperiods(LO4)How much money will your parents have at the end of three years to helpyou with graduate school, which you will start then? You plan to work on amaster's and perhaps a PhD. If graduate school costs $32,600 per year,approximately how long will you be able to stay in school based on thesefunds? Use 10 percent as the appropriate interest rate throughout this problem.Round all values to whole numbers.www.mhhe.com/bhd14e

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Answered: 46. Your younger sister, Brittany, will…

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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46. Your younger sister, Brittany, will start college in five years. She has just informed your parents that she wants to go to Eastern State U., which will cost $30,000 per year for four years (costs assumed to come at the end of each year). Anticipating Brittany's ambitions, your parents started investing $5,000 per year five years ago and will continue to do so for five more years. How much more will your parents have to invest each year for the next five years to have the necessary funds for Brittany's education? Use 10 percent as the appropriate interest rate throughout this problem (for discounting or compounding). Round all values to whole numbers. 47. Brittany (from Problem 46) is now 18 years old (five years have passed), and she wants to get married instead of going to college. Your parents have accumulated the necessary funds for her education. Instead of funding her schooling, your parents are paying $10.000 for her current wedding and plan to take year-end vacations costing $3,000 per year for the next three years. Annuity consideration (LO4) Special considerations of annuities and time periods (LO4) How much money will your parents have at the end of three years to help you with graduate school, which you will start then? You plan to work on a master's and perhaps a PhD. If graduate school costs $32,600 per year, approximately how long will you be able to stay in school based on these funds? Use 10 percent as the appropriate interest rate throughout this problem. Round all values to whole numbers.

Chapter 9 The Time Value of Money
283
b. How much interest will he pay over the life of the loan?
How much should he be willing to pay to get out of a 12 percent mortgage
and into a 10 percent mortgage with 30 years remaining on the mortgage?
Suggestion: Find the annual savings and then discount them back to the
present at the current interest rate (10 percent).
с.
45. You are chairperson of the investment fund for the Continental Soccer League.
You are asked to set up a fund of semiannual payments to be compounded
semiannually to accumulate a sum
annual rate (20 payments). The first payment into the fund is to take place six
months from today, and the last payment is to take place at the end of the 10th
Annuity with
changing interest
$200,000 after 10 years at an 8 percent
rates
(LO4)
year.
Determine how much the semiannual payment should be. (Round to whole
а.
numbers.)
On the day after the sixth payment is made (the beginning of the fourth
year) the interest rate goes up to a 10 percent annual rate, and you can earn a
10 percent annual rate on funds that have been accumulated as well as all future
payments into the fund. Interest is to be compounded semiannually on all funds.
b.
Determine how much the revised semiannual payments should be after this
rate change (there are 14 payments and compounding dates). The next
payment will be in the middle of the fourth year. (Round all values to
whole numbers.)
46. Your younger sister, Brittany, will start college in five years. She has just
informed your parents that she wants to go to Eastern State U., which will cost
$30,000 per year for four years (costs assumed to come at the end of each year).
Anticipating Brittany's ambitions, your parents started investing $5,000 per
year five years ago and will continue to do so for five more years.
How much more will your parents have to invest each year for the next
five years to have the necessary funds for Brittany's education? Use 10 percent
as the appropriate interest rate throughout this problem (for discounting or
compounding). Round all values to whole numbers.
Annuity
consideration
(LO4)
47. Brittany (from Problem 46) is now 18 years old (five years have passed),
and she wants to get married instead of going to college. Your parents have
accumulated the necessary funds for her education.
Instead of funding her schooling, your parents are paying $10,000 for her
current wedding and plan to take year-end vacations costing $3,000 per year for
the next three years.
Special
considerations of
annuities and time
periods
(LO4)
How much money will your parents have at the end of three years to help
you with graduate school, which you will start then? You plan to work on a
master's and perhaps a PhD. If graduate school costs $32,600 per year,
approximately how long will you be able to stay in school based on these
funds? Use 10 percent as the appropriate interest rate throughout this problem.
Round all values to whole numbers.
www.mhhe.com/bhd14e

47. Brittany (from Problem 46) is now 18 years old (five years have passed),
and she wants to get married instead of going to college. Your parents have
accumulated the necessary funds for her education.
Instead of funding her schooling, your parents are paying $10,000 for her
current wedding and plan to take year-end vacations costing $3,000 per year for
the next three years.
Special
considerations of
annuities and time
periods
(LO4)
How much money will your parents have at the end of three years to help
you with graduate school, which you will start then? You plan to work on a
master's and perhaps a PhD. If graduate school costs $32,600 per year,
approximately how long will you be able to stay in school based on these
funds? Use 10 percent as the appropriate interest rate throughout this problem.
Round all values to whole numbers.
www.mhhe.com/bhd14e

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