Your parents have accumulated a $130,000 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 $22,000 to help her get started, and they have decided to take year-end vacations costing $9,000 per year for the next four years. Use 6 percent as the appropriate interest rate throughout this problem. Use Appendix A and Appendix D for an approximate answer, but calculate your final answer using the formula and financial calculator methods. a. How much money will your parents have at the end of four years to help you with graduate school, which you will start then? Note: Do not round intermediate calculations. Round your final answer to 2 decimal places. Funds available for graduate school b. You plan to work on a master's and perhaps a PhD. If graduate school costs $24,580 per year, approximately how long will you be able to stay in school based on these funds? Note: Do not round intermediate calculations. Round your final answer to 2 decimal places. Number of years
Your parents have accumulated a $130,000 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 $22,000 to help her get started, and they have decided to take year-end vacations costing $9,000 per year for the next four years. Use 6 percent as the appropriate interest rate throughout this problem. Use Appendix A and Appendix D for an approximate answer, but calculate your final answer using the formula and financial calculator methods. a. How much money will your parents have at the end of four years to help you with graduate school, which you will start then? Note: Do not round intermediate calculations. Round your final answer to 2 decimal places. Funds available for graduate school b. You plan to work on a master's and perhaps a PhD. If graduate school costs $24,580 per year, approximately how long will you be able to stay in school based on these funds? Note: Do not round intermediate calculations. Round your final answer to 2 decimal places. Number of years
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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Transcribed Image Text:Your parents have accumulated a $130,000 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 $22.000 to help her get started, and they have decided to take year-end vacations costing $9,000 per year for the next four
years. Use 6 percent as the appropriate interest rate throughout this problem. Use Appendix A and Appendix D for an approximate
answer, but calculate your final answer using the formula and financial calculator methods.
a. How much money will your parents have at the end of four years to help you with graduate school, which you will start then?
Note: Do not round intermediate calculations. Round your final answer to 2 decimal places.
Funds available for graduate school
b. You plan to work on a master's and perhaps a PhD. If graduate school costs $24.580 per year, approximately how long will you be
able to stay in school based on these funds?
Note: Do not round intermediate calculations. Round your final answer to 2 decimal places.
Number of years
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