A client's child will be attending college in 5 years. Assume current tuition and fees are $46, 142, and inflation for college costs averages 6.7 percent, and Anna can earn 3.4 percent on the money she invests for this purpose. The client wants to know how much she will need to set aside today to pay four years of tuition and fees.

A client's child will be attending college in 5 years. Assume current tuition and fees are $46, 142, and inflation for college costs averages 6.7 percent, and Anna can earn 3.4 percent on the money she invests for this purpose. The client wants to know how much she will need to set aside today to pay four years of tuition and fees.

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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Similar questions

A student needs to borrow $7,000 to pay for college. She can get a loan at an APR of 10% to paid off in monthly installments over the next 4 years. If she decides to pay the loan off in monthly installments over 3 years instead of 4 years at the given APR, how much money will she save altogether. Round to the nearest cent
Wilma wants to buy a car that costs $52,000. She has arranged to borrow the total purchase price of the car from her bank at 6 percent interest rate. The loan requires monthly payments for a period of five years. If the first payment is due in one month after purchasing the car, what will be the amount of Wilma’s monthly payment on the loan?
You are saving for the university education of your two children. They are two years apart in age; one will begin university 15 years from today and the other will begin 17 years from today. You estimate your children's university expenses to be $45,000 per year per child, payable at the beginning of each school year. The annual interest rate is 7.5 percent. Your deposits begin one year from today. You will make your last deposit when your older child enters university. Assume four years of university. How much money must you deposit in an account each year to fund your children's education? (Do not round intermediate calculations. Round the final answer to 2 decimal places. Omit $ sign in your response.) Annual savings $
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? O $32,914.10 O $5,271.07 $3,657.12 $30,473.20 O $7,316.70
Mary wants to have $14000 for a trip to Mexico in five years. How much does she need to deposit at the end each month into an account earning 3.6% compounded monthly in order to have the money she needs?
Kerri James is considering the purchase of a car, which will cost her $24,600. She will borrow the entire purchase price and make monthly payments over the next six years. The first payment is due next month and the annual interest rate is 3.00%. She will owe $____ on the car immediately following the 18th payment. A. 18,858.19 B. 18,531.57 C. 20,757.33 D. 19,184.00 E. 23,258.56
Melissa wants to retire with $45,000 per month.she needs $4,500,000 in principal at the time she retires in order to generate this amount of monthly income if the interest rate is 12%.If Melissa has 28 years before retirement and has $90,000 to invest today.What simple interest rate does she need to achieve the necessary amount of principal?
Becca wants to save $900 per quarter for 3 years towards the purchase of an appliance. She feels that she can earn 5.42% compounded quarterly for this period of time. If she starts immediately, what is the most expensive appliance that she can purchase?
The parents of a newborn baby would like to put money away today to cover 100% of the child's expected total 4 - years of college tuition. The first tuition payment is due exactly 18 years from today, and the next three payments are due at the end of years 19, 20 and 21. Suppose that the parents estimate that the cost of tuition will be $86,000 per year for the first three years, but that the fourth year's tuition will be $96,000. Which comes closest to the amount of money that needs to be set aside today if the interest rate is 6% ? A. $ 104, 719 B. $ 136, 639 C. $ 16,857 D. $ 113, 608 E. $ 198, 781
You plan to establish a college education fund for your child. The current cost of college is $12,000 per year and you expect this to increase by 5% per year. You plan to deposit money into an account earning 10% per year at the end of each of the next 18 years. You will withdraw the amount required for college at the end of years 18-22. You want the deposit to be low initially and grow by the rate of your salary increase, which you estimate to be 3.5%. What will be the first deposit?How much will be in the account after 8 years?
Lynne needs to borrow $10000 for cosmetic surgery. She obtains a loan from her grandmother for 24 months at a simple interest rate of 6.9%. What is the loans future value?
Tayah is considering buying a new car for which she will need to borrow $23,900. But first, as she learned in FI 3300, Tayah wants to know how much she will have to pay per month on the dealership loan. The loan that Tayah is being offered has a five-year term, requires monthly payments, and has an interest rate of 4.4% p.a. What is the required monthly payment on this loan, assuming that the first payment will be made exactly one month from today? $439.22 $438.69 $444.48 $451.87 $442.74

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