The Jeffersons have asked you what would be needed to fund the children’s future college costs. Assume each child will begin college at age 18 and graduate in four years. Assume current costs are $24,000 per year and are expected to increase by 5% per year and investments earn 7%. A. Assuming no existing assets are dedicated to college, what is the annual savings amount required to fund the children’s education? The Jeffersons’ goal is to have an amount at the beginning of the freshman year for each child that is sufficient to fund a serial payment covering the $24,000 of current costs of college adjusted for inflation for each of the four years of college. Please include your calculator keystroke inputs [PV, I/YR, N, FV, and PMT (if needed)] for each step of this calculation. Also include whether any PMTs are in the end mode or the begin mode. B. What would you say to the Jeffersons about their education funding situation? Write a script of a single paragraph as if you were speaking to them about their college fund situation. Cover at least three aspects of their goal of financing their children’s college.
The Jeffersons have asked you what would be needed to fund the children’s future college costs. Assume each child will begin college at age 18 and graduate in four years. Assume current costs are $24,000 per year and are expected to increase by 5% per year and investments earn 7%. A. Assuming no existing assets are dedicated to college, what is the annual savings amount required to fund the children’s education? The Jeffersons’ goal is to have an amount at the beginning of the freshman year for each child that is sufficient to fund a serial payment covering the $24,000 of current costs of college adjusted for inflation for each of the four years of college. Please include your calculator keystroke inputs [PV, I/YR, N, FV, and PMT (if needed)] for each step of this calculation. Also include whether any PMTs are in the end mode or the begin mode. B. What would you say to the Jeffersons about their education funding situation? Write a script of a single paragraph as if you were speaking to them about their college fund situation. Cover at least three aspects of their goal of financing their children’s college.
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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The Jeffersons have asked you what would be needed to fund the children’s future college costs. Assume each child will begin college at age 18 and graduate in four years. Assume current costs are $24,000 per year and are expected to increase by 5% per year and investments earn 7%.
A. Assuming no existing assets are dedicated to college, what is the annual savings amount required to fund the children’s education? The Jeffersons’ goal is to have an amount at the beginning of the freshman year for each child that is sufficient to fund a serial payment covering the $24,000 of current costs of college adjusted for inflation for each of the four years of college. Please include your calculator keystroke inputs [PV, I/YR, N, FV, and PMT (if needed)] for each step of this calculation. Also include whether any PMTs are in the end mode or the begin mode.
B. What would you say to the Jeffersons about their education funding situation? Write a script of a single paragraph as if you were speaking to them about their college fund situation. Cover at least three aspects of their goal of financing their children’s college.
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