Jacob and Sophia's dream for their recently born daughter, Emily, is that one day she will attend their alma mater, Purdue University. For the next 18 years, they plan to make monthly payment deposits to a 529 College Savings Plan at a local bank. The account pays 5.25% annual interest, compounded monthly. Create a worksheet for Jacob and Sophia that uses a financial function to show the future value (FV) of their investment and a formula to determine the percentage of the college's tuition saved. Jacob and Sophia have supplied the following information: ● ● ● Out of state annual tuition (amount they are trying to save) = $52,000 per year Annual Rate = 5.25% Number of years for which they will make monthly payments = 18 Monthly payment = $425 Percentage of tuition saved = FV / Tuition for four years Jacob and Sophia are not sure how much they will actually be able to save each month. Use the concepts and techniques presented in module 4 to create a data table that show the future value and percentage of tuition saved for monthly payments from $175 to $775, in $50 increments.
Jacob and Sophia's dream for their recently born daughter, Emily, is that one day she will attend their alma mater, Purdue University. For the next 18 years, they plan to make monthly payment deposits to a 529 College Savings Plan at a local bank. The account pays 5.25% annual interest, compounded monthly. Create a worksheet for Jacob and Sophia that uses a financial function to show the future value (FV) of their investment and a formula to determine the percentage of the college's tuition saved. Jacob and Sophia have supplied the following information: ● ● ● Out of state annual tuition (amount they are trying to save) = $52,000 per year Annual Rate = 5.25% Number of years for which they will make monthly payments = 18 Monthly payment = $425 Percentage of tuition saved = FV / Tuition for four years Jacob and Sophia are not sure how much they will actually be able to save each month. Use the concepts and techniques presented in module 4 to create a data table that show the future value and percentage of tuition saved for monthly payments from $175 to $775, in $50 increments.
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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Question
I was supplied with the below instructions, details and a starting excel file. I'm kind of lost on where to start with the formulas.
Transcribed Image Text:1
2
A
Emily's 529 College Savings Plan
3 Annual Return
4 Monthly Payment
5 Years
6 Future Value
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
B
% of Tuition Saved
C
D
Monthly
Savings
175
225
275
325
375
425
475
525
575
625
675
725
775
E
Future
Value
F
% of Tuition
Saved
G
H
Transcribed Image Text:Jacob and Sophia's dream for their recently born daughter, Emily, is that one day she will attend their alma mater,
Purdue University. For the next 18 years, they plan to make monthly payment deposits to a 529 College Savings Plan at a
local bank. The account pays 5.25% annual interest, compounded monthly.
Create a worksheet for Jacob and Sophia that uses a financial function to show the future value (FV) of their investment
and a formula to determine the percentage of the college's tuition saved.
Jacob and Sophia have supplied the following information:
●
●
●
Out of state annual tuition (amount they are trying to save) = $52,000 per year
Annual Rate = 5.25%
Number of years for which they will make monthly payments = 18
Monthly payment = $425
Percentage of tuition saved = FV / Tuition for four years
Jacob and Sophia are not sure how much they will actually be able to save each month. Use the concepts and techniques
presented in module 4 to create a data table that show the future value and percentage of tuition saved for monthly
payments from $175 to $775, in $50 increments.
Expert Solution
Concept:
Future value (FV) is the value of an investment or cash flow at a specific point in the future, based on a specified interest rate or rate of return. It represents the total amount of money that an investment will grow to over time, assuming that all cash flows are reinvested at the same rate of return.
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