Your parents have accumulated a $120,000 nest egg. They have been planning to use this money to pay college costs to be incurred by you and your sister, Courtney. However, Courtney has decided to forgo college and start a nail salon. Your parents are giving Courtney $15,000 to help her get started, and they have decided to take year-end vacations costing $10,000 per year for the next four years. How much money will your parents have at the end of four years to help you with graduate school? You plan to work on a master's and perhaps a PhD. If graduate school costs $26,353 per year, approximately how long will you be able to stay in school based on these funds? Use 9 percent as the appropriate interest rate throughout this problem. Round all values to whole numbers. Refer to this information to solve the rest of the questions. What are the funds available after the Nail Salon? ○ $100,000 ○ $105,000 ○ $72,000 $98,500 What is the Present Value of the vacations? $32,397 $37,900 $45,000 $24,643 What are the funds available after vacations? $46,000 $83,750 $75,002 $72,603 Future Value: What are the funds available for graduate school? $102,485 $100,450 $92,000 $108,489 How many years of graduate school can be funded with your financial management? Hint: Refer to Appendix D for the formula to calculate the available funds after graduate school. O O о N=5 N=8 N=6 N=2
Your parents have accumulated a $120,000 nest egg. They have been planning to use this money to pay college costs to be incurred by you and your sister, Courtney. However, Courtney has decided to forgo college and start a nail salon. Your parents are giving Courtney $15,000 to help her get started, and they have decided to take year-end vacations costing $10,000 per year for the next four years. How much money will your parents have at the end of four years to help you with graduate school? You plan to work on a master's and perhaps a PhD. If graduate school costs $26,353 per year, approximately how long will you be able to stay in school based on these funds? Use 9 percent as the appropriate interest rate throughout this problem. Round all values to whole numbers. Refer to this information to solve the rest of the questions. What are the funds available after the Nail Salon? ○ $100,000 ○ $105,000 ○ $72,000 $98,500 What is the Present Value of the vacations? $32,397 $37,900 $45,000 $24,643 What are the funds available after vacations? $46,000 $83,750 $75,002 $72,603 Future Value: What are the funds available for graduate school? $102,485 $100,450 $92,000 $108,489 How many years of graduate school can be funded with your financial management? Hint: Refer to Appendix D for the formula to calculate the available funds after graduate school. O O о N=5 N=8 N=6 N=2
Pfin (with Mindtap, 1 Term Printed Access Card) (mindtap Course List)
7th Edition
ISBN:9780357033609
Author:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk
Publisher:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk
Chapter14: Planning For Retirement
Section: Chapter Questions
Problem 2FPE
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Question
Transcribed Image Text:Your parents have accumulated a $120,000 nest egg. They have been planning to use this
money to pay college costs to be incurred by you and your sister, Courtney. However,
Courtney has decided to forgo college and start a nail salon. Your parents are giving Courtney
$15,000 to help her get started, and they have decided to take year-end vacations costing
$10,000 per year for the next four years.
How much money will your parents have at the end of four years to help you with graduate
school? You plan to work on a master's and perhaps a PhD. If graduate school costs $26,353
per year, approximately how long will you be able to stay in school based on these funds?
Use 9 percent as the appropriate interest rate throughout this problem. Round all values to
whole numbers.
Refer to this information to solve the rest of the questions.
What are the funds available after the Nail Salon?
○ $100,000
○ $105,000
○ $72,000
$98,500
What is the Present Value of the vacations?
$32,397
$37,900
$45,000
$24,643
What are the funds available after vacations?
$46,000
$83,750
$75,002
$72,603
Future Value: What are the funds available for graduate school?
$102,485
$100,450
$92,000
$108,489
How many years of graduate school can be funded with your financial management? Hint:
Refer to Appendix D for the formula to calculate the available funds after graduate school.
O O
о
N=5
N=8
N=6
N=2
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