Perry is a freshman. He estimates that the cost of tuition, books, room and board, transportation, and other incidentals will be $21,000 this year. He expects these costs to rise about $1500 each year while he is in college. If it will take him 5 years to earn his BS, what is the present cost of his degree at an interest rate of 4%? If he earns an extra $15,000 annually for 40 years, what is the present worth of his degree?
Perry is a freshman. He estimates that the cost of tuition, books, room and board, transportation, and other incidentals will be $21,000 this year. He expects these costs to rise about $1500 each year while he is in college. If it will take him 5 years to earn his BS, what is the present cost of his degree at an interest rate of 4%? If he earns an extra $15,000 annually for 40 years, what is the present worth of his degree?
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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Perry is a freshman. He estimates that the cost of tuition, books, room and board, transportation, and other incidentals will be $21,000 this year. He expects these costs to rise about $1500 each year while he is in college. If it will take him 5 years to earn his BS, what is the present cost of his degree at an interest rate of 4%? If he earns an extra $15,000 annually for 40 years, what is the present worth of his degree?
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