What is the opportunity cost of going to college this term?
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Suppose your expenses for summer school are as follows: tuition: $5,000, room and board: $3,000, books and other educational supplies: $500. Further, during the term, you can only work part-time and earn $4,000 instead of your full-time salary of $10,000. What is the opportunity cost of going to college this term?
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- FinanceWhen you graduate from college, you apply for and are offered a job that pays $1,900 per month. You have a student loan debt of $14,000 with a 4% interest rate. Answer parts a) through e) below. a) What should your maximum rent be to keep your Front-End DTI Ratio no higher than 29%? $ 551 (Round to the nearest dollar as needed.) b) What should your maximum student loan payment be to maintain a 37% Back-End DTI Ratio? $ 152 (Round to the nearest dollar as needed.) c) Use technology to determine how long it will take to pay off the loan using the payment from part b). 110 month(s) (Round to the nearest whole number as needed.) d) You want to pay off the loan in a more reasonable amount of time, 72 months. Use technology to determine the amount that the loan payment needs to be to meet this goal. $ 219 (Round to the nearest dollar as needed.) e) If you increase the loan payment to the amount calculated in part d), what minimum income level do you need to maintain your present lifestyle…You're a graduate and the company that hires you offers a job that includes a paid apartment in Austin. You only need to pay for services and maintenance. You go ahead and make calculations and come up that each year you need to pay $36,000 to cover all expenses. Each year it sums up to $36,500 and every consequent year increasing by $500 through year 10. At an interest rate of 10% per year, the present worth of the maintenance costs are going to be how much?
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- Suppose that you are in the fall of your senior year and are faced with the choice of either getting a job when you graduate or going to law school. Of course, your choice is not purely financial. However, to make an informed decision you would like to know the financial implications of the two alternatives. Let's assume that your alternatives are as follows: If you take the "get a job" route you expect to start off with a salary of $40,000 per year. There is no way to predict what will happen in the future, your best guess is that your salary will grow at 5 percent per year until you retire in 45 years. As a law student, you will be paying $25,000 per year tuition for each of the 3 years you are in graduate school. However, you can then expect a job with a starting salary of $75,000 per year. Moreover, you expect your salary to grow by 7 percent per year until you retire 39 years later. Clearly, your total expected lifetime salary will be higher if you become a…--you live in the mobile home for four years, but your roommate also pays you $3,000 a year, paid to you at the beginning of each year. The cost of the mobile home is $15,000, paid immediately. At the end of four years, you can sell the mobile home for $9,000. You have no maintenance on the home because you were such a smart manager Using Present Value, what is the cost of your college housing (positive or negative), assuming an interest rate of 8%?As a future graduate of the University of Minnesota, someday you would like to endow a scholarship (meaning give the university money in your name) to pay for tuition expenses for future UMN students. Assume you just graduated (congratulations!). You plan to work for fifteen years after graduation before endowing this scholarship (at the end of the fifteenth year AFTER graduation). Annual tuition at UMN is $10,000 today, and is expected to grow at the long-term average rate of inflation of 3% per year forever. Savings are expected to earn a return of 7% per year forever. a) The first tuition payment is due one year after the scholarship is endowed. How much will the tuition be when your scholarship makes the first payment? b) You would like the scholarship to pay all tuition for one student per year for the twenty years following the creation of the endowment, how much money do you need to endow the scholarship? c)If you would like the scholarship to pay for tuition for one student…