Chapter 8, Problem 4P

John is trying to decide if he should attend college or not. Part of his decision will be based on the return on investment of college.  He estimates that the cost to attend Texas Tech, including room and board, is $24,044 per year. He also assumes costs will rise by 6% per year.  How much is a 4-year degree going to cost, John? N 4 I/Y   PV 0 PMT   FV

You plan to establish a college education fund for your child. The current cost of college is $12,000 per year and you expect this to increase by 5% per year. You plan to deposit money into an account earning 10% per year at the end of each of the next 18 years. You will withdraw the amount required for college at the end of years 18-22. You want the deposit to be low initially and grow by the rate of your salary increase, which you estimate to be 3.5%. What will be the first deposit?How much will be in the account after 8 years?

A college savings education plan claims that had you invested $375 per month in the plan for the last 16 years you would have accumulated $280,000. Assuming the investments were made at the end of each month, calculate the effective annual rate of return an investor would have received on a compounded basis using either Goal Seek or Solver.

A friend of yours who had taken an engineering economy course stated that paying on a student loan even before graduation will give you a big break on the total loan costs. She cites the following example to illustrate her point. A student takes out a $10,000 loan for their freshman year of college, and the interest rate is 7% compounded semi-annually over 10 years. With full deferral of this loan, meaning that no payments are dueuntil six months after graduation, the original loan will have grown to $13,630 thanks to interest: F = $10, 000(F/P, 3.5% per six months, 9 periods) = $13, 630. Your friend says that paying just $75 per month, or $4,050 over the same 4.5 years would reduce the ending balance to about $8,960. Show how this amount ($8,960) was determined.

Tuition at the Home State University is currently $10,000 per year, increasing on the average of 6% per year. What is the lump sum needed at the beginning of the freshman year of college to fund an 8-year old child's college education for 4 years starting at age 18, if the investment return is expected to be 4%? $65,778 $67,706 O $78,342 $69.502

If it cost $50,000 to attend a public university today, what would it cost to attend that same university 18 years from now assuming that the cost escalated at a rate of 6% per year (annual compounding)?

Megan Berry, a freshman horticulture major at the University of Minnesota, has some financial questions for the next three years of school and beyond. Round your answers for the following questions to the nearest dollar. If Megan's tuition, fees, and expenditures for books this year total $24,000, what will they be during her senior year (three years from now), assuming costs rise 7 percent annually? (Hint: Use Appendix A-1 or the Garman/Forgue companion website.) Round Future Value of a Single Amount in intermediate calculations to four decimal places. $   Megan is applying for a scholarship currently valued at $3,000 at the end of first year. If she is awarded it at the end of next year, how much is the scholarship worth in today's dollars, assuming inflation of 2 percent? (Hint: Use Appendix A-2 or the Garman/Forgue companion website.) Round Present Value of a Single Amount in intermediate calculations to four decimal places. $

Megan Berry, a freshman horticulture major at the University of Minnesota, has some financial questions for the next three years of school and beyond. Round your answers for the following questions to the nearest dollar. If Megan's tuition, fees, and expenditures for books this year total $19,000, what will they be during her senior year (three years from now), assuming costs rise 3 percent annually? (Hint: Use Appendix A-1 or the Garman/Forgue companion website.) Round Future Value of a Single Amount in intermediate calculations to four decimal places. $   Megan is applying for a scholarship currently valued at $1,000 at the end of first year. If she is awarded it at the end of next year, how much is the scholarship worth in today's dollars, assuming inflation of 2 percent? (Hint: Use Appendix A-2 or the Garman/Forgue companion website.) Round Present Value of a Single Amount in intermediate calculations to four decimal places. $   Megan is already looking ahead to graduation…

Show complete solution. Don't use excel for solution. You need P50,000 per year for four years to go to college. Your father invested P12000 per year in a 10.120% account for your education starting from the year you were born until you were 18. If you withdraw the P50,000 at the end of your 19th, 20th, 21st, and 22nd years to aid you in your college years, how much money will be left in the account at the end of your last withdrawal?