General finance assume the first payment accors at the beginning of year 5 Kristen is planning for her son's college education to begin 5years from today. She estimates the yearly tuition, books, andliving expenses to be $5,000 per year for a four-year degree.How much must Kristin deposit today, at an interest rate of 8%,for her son to be able to withdraw $5,000 per year for fouryears of college? Assume the first payment occurs at thebeginning of Year 5 (i.e. she will make the first payment on thefirst day of college).a) 13,153b) 13,623c) 12,173d) 12,693e) None of the above.

Step 1: Define Savings PlanA savings plan will guide people to achieve a specific financial goal.…

Answered: Kristen is planning for her son's…

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter5: The Time Value Of Money

Section: Chapter Questions

Problem 33P

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Ginny is planning for her son's college education to begin five years from today. She estimates the yearly tuition,books, and living expenses to be $5,000 per year for a four-year degree. How much must Ginny deposit today, at aninterest rate of 8 percent, for her son to be able to withdraw $5,000 per year for four years of college? Assume the firstbeginning of Year 5. In other words, she will pay the first payment on the first day of school.a. $20,000b. $13,620c. $12,273d. $12,173
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A man wants to help provide a college education for his young daughter. He can afford to invest $1500/yr for the next 5 years, beginning on the girl’s 5th birthday. He wishes to give his daughter $10,000 on her 18th, 19th, 20th, and 21st birthdays, for a total of $40,000. Assuming 6% interest, what uniform annual investment will he have to make on the girl’s 9th through 17th birthdays? PLEASE USE EXCEL SOFTWARE TO SOLVE. WOULD GIVE POSITIVE RATING.

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