Question 2 Jacob Taylor is a young man from Belvedere, London. He has 3 years left till graduation. He is considering two colleges to pursue his post-graduation at University College, Dublin or the University of Liverpool. The tuition at Liverpool is DKK 14,000 a year. Jacob, however, can take advantage of a 10% discount on the tuition at Liverpool, since he was born in London. Dublin has a considerably higher yearly tuition, DKK 19,000 and is considered a more prestigious choice. Assume that the appropriate nominal interest/discount rate is 5%. A post-graduation degree in the UK is of 3 years. a) How much is the first year tuition worth at the time of the start of his post-graduation for each school? Assume that he will have to pay tuition exactly one year from the start. b) What is the value of the total tuition fee Jacob will pay over the 3 years, at the start of his post- graduation tenure at each university?

Question 2 Jacob Taylor is a young man from Belvedere, London. He has 3 years left till graduation. He is considering two colleges to pursue his post-graduation at University College, Dublin or the University of Liverpool. The tuition at Liverpool is DKK 14,000 a year. Jacob, however, can take advantage of a 10% discount on the tuition at Liverpool, since he was born in London. Dublin has a considerably higher yearly tuition, DKK 19,000 and is considered a more prestigious choice. Assume that the appropriate nominal interest/discount rate is 5%. A post-graduation degree in the UK is of 3 years. a) How much is the first year tuition worth at the time of the start of his post-graduation for each school? Assume that he will have to pay tuition exactly one year from the start. b) What is the value of the total tuition fee Jacob will pay over the 3 years, at the start of his post- graduation tenure at each university?

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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Suppose that, at age 30, you might wish to leave your job and pursue a master’s degree. If you choose to remain at your job, your employer would pay you $74k per year until retirement, at age 55. If you go back to the university, you would have to sacrifice 2 years of income, but once you graduate, you would receive $117k per year until you retire at age 55. The master’s program you are interested in costs $22k per year. Note: The term “k” is used to represent thousands (× $1,000). Required: At an opportunity cost of 8%, determine the percentage difference between your most and least profitable alternatives, with the least profitable option as the basis for your calculation.Answer% Intermediate calculations must be rounded to 3 decimal places (at least). Input your answer as a percent rounded to 2 decimal places (for example: 28.31%).
B) Pinky's father is planning to admit her in a reputed university 5 years from now. Pinky is currently 15 years old; she will enroll in a university 5 years later and should graduate within 4 years. They are anticipating after 5 years the annual cost (for everything tuition fee, books) will be BDT 1, 40,060 but this cost is expected to increase by 4% annually. Universities accept the total payment in advance at the beginning of the year. Pinky currently has a saving account with BDT 100,000 in it which pays 9% interest annually. Her father is planning to make five equal annual deposit to her account; The first deposit will be made today. How large each of the annual deposit should be?
3
You want to save up to pay your 9-year-old child's college tuition fee, which costs $63,200, when he'll be 17. Given an interest rate of 3.5%, how much would you need to invest now to be able to pay for their college. Select one: a.$47,994.81 b.$21,403.06 c.$39,058.98 d.$29,394.81
PART B: BORROWING MONEY Serena is going to college to study nursing. She estimates that she will need $35,000 to cover her three-year program. Her costs include living expenses, food, tuition, books and school supplies. She estimates that she will be able to save $12,500 from her summer job to help pay for college. She will borrow the remaining money for 5 years, compounded monthly at 3.8%. a) How much money will Serena be borrowing from the bank? (KN-2) b) What will Serena's monthly payments be? (AP-3) PV PMT FV Rate 3.8% Periods Compounding Monthly c) How much interest does she pay on the loan? (AP-2) = = = = = PART C: SAVING FOR THE FUTURE You and your best friend have decided that you are going to go an African Safari once you have graduated from college. You estimate that this trip of a lifetime will cost $12,000. You decide that you will start investing for your trip now. You will be investing money for 4 years in account with an interest rate of 6.15% compounded quarterly. a)…
please answer only last reuriement You are a young personal financial adviser. Molly, one of your clients approached you for consultation about her plan to save aside $450,000 for her child’s higher education in United States 15 years from now. Molly has a saving of $120,000 and is considering different alternative options: Investment 1: Investing that $120,000 in a saving account for 15 years. There are two banks for her choice. Bank A pays a rate of return of 8.5% annually, compounding semi-annually. Bank B pays a rate of return of 8.45 annually, compounding quarterly. Investment 2: Putting exactly an equal amount of money into ANZ Investment Fund at the end of each month for 15 years to get 330 000 she still shorts of now. The fund is offering a rate of return 7% per year, compounding monthly. Required: a) Identify which Bank should Molly choose in Investment 1 by computing the effective annual interest rate (EAR)? b) Calculate the amount of money Molly would accumulate…
QUESTION 1 Liam can afford $175 per month as a car payment. If Liam can get an auto loan at 4% interest for 5 years, how expensive of a car can Liam afford? Give your answer to the nearest dollar.
your parents are giving you $220 a month for 4 years while you are in college. At an interest rate of .51 percent per month, what are these payments worth to you when you first start college?
3
1. As a university scholar, you are entitled to a free one-way ticket from the university back to your hometown every year. Airplane tickets increase approximately Php 400.00 every year. Currently, the cost of a plane ticket from Manila to you city is Php 3500.00. How much should you request from the university to deposit in a saving account to fund your tickets for 5 years? Assume that the interest rate is fixed at 4%. 2.A business tycoon is planning to provide a scholarship to one deserving student that will provide a monthly allowance of P3,000.00 indefinitely, beginning one month from now. How much should be invested today to cover the scholarship if: a.) the interest rate is 12% b.) the interest rate is 12% and the first monthly allowance is given 1 year from now.
Question 4 Anne Murray is planning to buy a rental property, in addition to the family home she and Henry own. She is considering a property in Bristol costing £210,000. She has savings of £85,000 which she will use as a deposit but will need to borrow the remaining amount for the purchase. She has had a fixed-rate mortgage agreed in principle by Royal East Bank, for which she will be charged 4.75% interest. She wants to know what income she might expect to get on her investment. Local agents have estimated that the monthly rent may be £1,450 per month, with agent’s fees for managing the property being charged at 5% of the rent. Provide Anne with an estimate of the relevant costs of renting the property and the net rental income that she might expect to get. Anne has estimates for some of the other costs she will incur as follows: Repairs and maintenance per year £700 Property insurance per year £395 Mortgage arrangement fee £1950…

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