Assume today is 1 September, and this is the birthday of your two children, Ashley and Alex. Ashley is `0' years old and Alex is `7' years old. Both children will start college when they turn 18. Ashley will take 3 years to graduate and you will pay tuition of £15,000 per year at the beginning of each school year. Alex will take 7 years to graduate and you will pay tuition of £10,000 per year, payable at the beginning of each school year. The interest rate is 1%. c) Instead, you prefer to pay a constant amount of money at the beginning of each year, starting next year until the year of the last tuition bill, to cover the present value of the totality of the tuition fees. How much should you be paying each year? Please provide the details of your calculations and discuss your results.
Assume today is 1 September, and this is the birthday of your two children, Ashley and Alex. Ashley is `0' years old and Alex is `7' years old.
Both children will start college when they turn 18. Ashley will take 3 years to graduate and you will pay tuition of £15,000 per year at the beginning of each school year. Alex will take 7 years to graduate and you will pay tuition of £10,000 per year, payable at the beginning of each school year. The interest rate is 1%.
c) Instead, you prefer to pay a constant amount of money at the beginning of each year, starting next year until the year of the last tuition bill, to cover the
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