A professor has two daughters that he hopes will one day go to college. Currently, in-state students at the local University pay about $20,241.00 per year (all expenses included). Tuition will increase by 3.00% per year going forward. The professor's oldest daughter, Sam, wit start college in 16 years, while his youngest daughter, Ellie, will begin in The professor is saving for their college by putting money in a mutual fund that pays about 7.00% per year. Tuition payments are at the beginning of the year and college will take 4 years for each girl. (Sam's first tuition payment will be in exactly 16 years) years. The professor has no usion that the state lottery funded scholarship will still be around for his girls, so how much does he need to deposit each year in this mutual fund to successfully put each daughter through college. (ASSUME that the money stays invested during college and the professor will make his last deposit in the account when Sam, the OLDEST daughter, starts college.)

A professor has two daughters that he hopes will one day go to college. Currently, in-state students at the local University pay about $20,241.00 per year (all expenses included). Tuition will increase by 3.00% per year going forward. The professor's oldest daughter, Sam, wit start college in 16 years, while his youngest daughter, Ellie, will begin in The professor is saving for their college by putting money in a mutual fund that pays about 7.00% per year. Tuition payments are at the beginning of the year and college will take 4 years for each girl. (Sam's first tuition payment will be in exactly 16 years) years. The professor has no usion that the state lottery funded scholarship will still be around for his girls, so how much does he need to deposit each year in this mutual fund to successfully put each daughter through college. (ASSUME that the money stays invested during college and the professor will make his last deposit in the account when Sam, the OLDEST daughter, starts college.)

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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Tom and Sandy have set up a sinking fund in order to have $21,000.00 in 5 years for their child's college education. How much should be paid monthly into an ordinary annuity earning 7.46% compounded monthly so that they reach their goal? How much interest is earned during the last year? (Note: Your answer is a dollar amount and should include a dollar sign)
A professor has two daughters that he hopes will one day go to college. Currently, in-state students at the local University pay about $20,246.00 per year (all expenses included). Tuition will increase by 4.00% per year going forward. The professor's oldest daughter, Sam, will start college in 16 years, while his youngest daughter, Ellie, will begin in 18 years. The professor is saving for their college by putting money in a mutual fund that pays about 8.00% per year. Tuition payments are at the beginning of the year and college will take 4 years for each girl. (Sam's first tuition payment will be in exactly 16 years) The professor has no illusion that the state lottery funded scholarship will still be around for his girls, so how much does he need to deposit each year in this mutual fund to successfully put each daughter through college. (ASSUME that the money stays invested during college and the professor will make his last deposit in the account when Sam, the OLDEST daughter,…
Sheldon Cooper and Amy Fowler are married and live in Pasadena, California. They have as a new investment goal to create a college fund for their newborn daughter. They estimate that they will need $195,000 in 18 years. Assuming that the Cooper-Fowler family could obtain a return of 5 percent, how much would they need to invest annually to reach their goal? Use Appendix A-3 or the Garman/Forgue companion website. Round your answer to the nearest dollar. Round Future Value of a Series of Equal Amounts in intermediate calculations to four decimal places.
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Mikayla and Peyton plan to send their son to university. To pay for this they will contribute 9 equal yearly payments to an account bearing interest at the APR of 8.6%, compounded annually. Four years after their last contribution, they will begin the first of five, yearly, withdrawals of $57,300 to pay the university's bills. How large must their yearly contributions be?
A young student 22 years old has just graduated from college. She accepts a good job and desires to establish her own retirement fund. At the end of each year thereafter she plans to deposit P2,000 in a fund at 15% annual interest. How old will she be when the fund has an accumulated value of P1,000,000?
A wealthy graduate of a local university wants to establish a scholarship to cover the full cost of one student each year in perpetuity at her university. To adequately prepare for the administration of the scholarship, the university will begin awarding it starting in three years. The estimated full cost of one student this year is $32,000 and is expected to stay constant in real terms in the future. If the scholarship is invested to earn an annual real return of 10 percent, how much must the donor contribute today to fully fund the scholarship? Note: Negative value should be indicated by a parenthesis. > Answer is complete but not entirely correct. $(240,421) X Contribution
A wealthy graduate of a local university wants to establish a scholarship to cover the full cost of one student each year in perpetuity at her university. To adequately prepare for the administration of the scholarship, the university will begin awarding it starting in three years. The estimated full cost of one student this year is $38,000 and is expected to stay constant in real terms in the future. If the scholarship is invested to earn an annual real return of 5 percent, how much must the donor contribute today to fully fund the scholarship?
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