Present value Prestigious University is offering a new admission and tuition payment plan for all alumni. On the birth of a child, parents can guarantee admission to Prestigious if they pay the first year's tuition. The university wll pay an annual rate of return of 7% on the deposited tuition, and a full refund will be available if the child chooses another university. The tuition is expected to be $16,000 a year at Prestigious 19 years from now. What would parer pay today if they just gave birth to a new baby and the child will attend college in 19 years? How much is the required payment to secure admission for their child if the interest rate falls to 2%? What would parents pay today if they just gave birth to a new baby and the child will attend college in 19 years? to the nearest cent

Present value Prestigious University is offering a new admission and tuition payment plan for all alumni. On the birth of a child, parents can guarantee admission to Prestigious if they pay the first year's tuition. The university wll pay an annual rate of return of 7% on the deposited tuition, and a full refund will be available if the child chooses another university. The tuition is expected to be $16,000 a year at Prestigious 19 years from now. What would parer pay today if they just gave birth to a new baby and the child will attend college in 19 years? How much is the required payment to secure admission for their child if the interest rate falls to 2%? What would parents pay today if they just gave birth to a new baby and the child will attend college in 19 years? to the nearest cent

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

See similar textbooks

Similar questions

Suppose that you take out an unsubsidized Stafford loan on September 1 before your junior year for $45004500 and plan to begin paying it back on December 1 after graduation and grace period 27 months later. The interest rate is 6.8%. How much of what you will owe will be interest?$Round your answer to the nearest cent.
Rodriguez: Attempt 1 to have $120,000 in 15 years for their children's college education. How much should be paid. semiannually into an account paying 6.8% compounded semiannually? Problem: A newborn child receives a one time $20,000 gift toward college from her grandparents. How much will the $20,000 be worth in 17 years if it is invested at 7% compounded quarterly? Problem: If you buy a computer directly from the manufacturer for $2,500 and agree to repay it in 48 equal installments at 1.25% interest per month on the Q Search ly 1. A F 2. A=P 3. A- PA
Assume that you just inherited an annuity that will pay you $10,000 per year for 10 years, with the first payment being made today. A friend of your mother offers to give you $60,000 for the annuity. If you sell it, what rate of return would your mother’s friend earn on his investment? If you think a “fair” return would be 6%, how much should you ask for the annuity? What keys do I need to enter in a financial calculator to get the answers of (13.70%, $78,016.92)/ only show me the keys to enter in a financial calculaotr. not excel and not algebra
Suppose that your parents are willing to lend you $20,000 for part of the cost of your college education and living expenses. They want you to repay them the $20,000, without any interest, in a lump sum 15 years after you graduate, when they plan to retire and move. Meanwhile, you will be busy repaying federally guaranteed loans for the first 10 years after graduation. But you realize that you won’t be able to repay the lump sum without saving up. So you decide that you will put aside money in an interest-bearing account every month for the five years before the payment is due. You feel comfortable with putting aside $275 a month (the amount of the payment on your college loans, which will be paid off after 10 years). How high an annual nominal interest rate on savings do you need to accumulate the $20,000 in 60 months, if interest is compounded monthly? Enter into a spreadsheet the values d 5 275, r 5 0.05 (annual rate), and n 5 60, and the savings formula with r replaced by r/12 (the…
Please show financial calculator inputs for this problem.…Your sister would like your help planning for her new daughter’s college education. She has estimated that the cost of 1 year of college (tuition, room, and board) is currently $60,000 a year. The cost of college is estimated to increase at an annual rate of 5%. She would like you to figure out how much she would need to deposit at the end of each month for the next 18 years to cover her daughter’s four years of tuition assuming her deposits will earn 12% each year (1 % a month) (Note your account will earn interest a 1% a month even if you are not making monthly payments after you stop paying in at the end of the 18th year.
Pete Morton is planning to go to graduate school in a program of study that will take three years. Pete wants to have $12 available each year for various school and living expenses. If he earns 12 percent on his money, how much must be deposited at the start of his studies to be able to withdraw $12 a year for three years? Use Exhibit 1-D (Round time value factor to 3 decimal places and final answer to the nearest whole number.) Future value
Your son Tommy was just born today (Year O), and you are planning for his college education. You would like to make equal deposits every 26 weeks (assume a 52-week year) into a college savings account starting in Year 1 and ending in Year 21 (a total of 41 deposits), so that Tommy can make annual withdrawals in Year 18, 19, 20, and 21 for tuition. Tuition is currently (Year 0) $2,900/year, and it is expected to grow at 4% / year for each of the next 10 years, and then at 5%/year for all years after. You can earn a nominal annual rate of 8.45%, with interest compounded weekly (52-week year) in a college savings account. How much must each of the 41 deposits be to exactly fund the expected tuition expense? O $277.87 O $264.49 O $258.02 O $248.10 O $287.80
A chiropractic student receives a 10-year PLUS Loan for $50,000 to complete the last 2 years of the program. If the interest rate of the loan is 5.48% and the student begins repaying the loan 2 years after graduation, what will the student's monthly payments be (in dollars)? (Assume the loan has a deferred payment plan. Round your answer to the nearest cent.)
The parents of a newborn baby would like to put money away today to cover 100% of the child's expected total 4 - years of college tuition. The first tuition payment is due exactly 18 years from today, and the next three payments are due at the end of years 19, 20 and 21. Suppose that the parents estimate that the cost of tuition will be $86,000 per year for the first three years, but that the fourth year's tuition will be $96,000. Which comes closest to the amount of money that needs to be set aside today if the interest rate is 6% ? A. $ 104, 719 B. $ 136, 639 C. $ 16,857 D. $ 113, 608 E. $ 198, 781
Assume the total cost of a college education will be $365,000 when your child enters college in 18 years. You presently have $59,000 to invest. What annual rate of interest must you earn on your investment to cover the cost of child's college education? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) your Annual rate %
A couple will retire in 40 years; they paln to spend about $23,000 a retirement, which should last about 20 years. They believe that they can earn 9% interest on retirement savings. a. If they make annual payments into a savings plan, how much will they need to save each year? b. How would the answer to part (a) change if the couple realizes that in 15 years they will need to spend $63,000 on their childs college education?
A student needs to borrow $9,000 to pay for college. She can get the loan at an APR of 10% to be paid off in monthly installments over the next 4 years. If she decides to pay the loan off in monthly installments over 3 years instead of 4 years at the given APR, how much money will she save altogether? Round your answer to the nearest cent.) 62.14

Recommended textbooks for you

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Foundations Of Finance

Finance

ISBN:

9780134897264

Author:

KEOWN, Arthur J., Martin, John D., PETTY, J. William

Publisher:

Pearson,

Fundamentals of Financial Management (MindTap Cou…

Finance

ISBN:

9781337395250

Author:

Eugene F. Brigham, Joel F. Houston

Publisher:

Cengage Learning

Corporate Finance (The Mcgraw-hill/Irwin Series i…

Finance

ISBN:

9780077861759

Author:

Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor

Publisher:

McGraw-Hill Education

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Foundations Of Finance

Finance

ISBN:

9780134897264

Author:

KEOWN, Arthur J., Martin, John D., PETTY, J. William

Publisher:

Pearson,

Fundamentals of Financial Management (MindTap Cou…

Finance

ISBN:

9781337395250

Author:

Eugene F. Brigham, Joel F. Houston

Publisher:

Cengage Learning

Corporate Finance (The Mcgraw-hill/Irwin Series i…

Finance

ISBN:

9780077861759

Author:

Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor

Publisher:

McGraw-Hill Education

SEE MORE TEXTBOOKS