Essentials of Investments (The Mcgraw-hill/Irwin Series in Finance, Insurance, and Real Estate)
Essentials of Investments (The Mcgraw-hill/Irwin Series in Finance, Insurance, and Real Estate)
10th Edition
ISBN: 9780077835422
Author: Zvi Bodie Professor, Alex Kane, Alan J. Marcus Professor
Publisher: McGraw-Hill Education
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Chapter 21, Problem 16PS
Summary Introduction

To determine:

Use spreadsheet 21.10 to assess the present value of a 1% increase in college tuition as a fraction of the present value of labor income.

Introduction:

College education creates a need of financing a large expenditure for few years. There is no need for any other planning tools to fund these large expenditure as they can be financed out of savings. The only effect it would have is reduced savings. Such reduction should only be allowed until cumulative savings are positive. In turn it would only effect the reduced retirement annuity.

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