Question

EY Family is going to study. First son will start 6 years from today while the second one will enter the school 8 years from today. The parents estimate the expenses to be $65,000 per year son payable at the beginning of each school year with each child spending 4 years in school.

Answer the following homework:

1. Timeline for this case.

2.How much the parents should deposit each year if they begin to make their deposits one year from today with the last deposit made when the first child enters school.. Assume that their deposits earn 10% each year.

3. How much must the parents deposit each year if they begin to make their deposits today with the last deposit made one year before the first child enters school?

4. How much must the parents deposit each year if they begin to make their deposits today with the last deposit made when the first child enters school.

Answer #1

Bob and Brad are preparing for the collage education of their
two children. The eldest child will start her University studies 6
years from today while the second will enter University 8 years
from today. Bob and Brad estimate collage expenses to be $65,000
per year per child, payable at the beginning of each school year
with each child spending 4 years in University.
Draw the timeline for this problem.
How much must they deposit each year if they begin...

You are saving for the college education of your two children.
They are two years apart in age; one will begin college 15 years
from today and the other will begin 17 years from today. You
estimate your children’s college expenses to be $43,000 per year
per child, payable at the beginning of each school year. The
appropriate interest rate is 7.3 percent. Your deposits begin one
year from today. You will make your last deposit when your oldest
child...

You are saving for the college education of your two children.
They are two years apart in age; one will begin college 13 years
from today and the other will begin 15 years from today. You
estimate your children’s college expenses to be $39,000 per year
per child, payable at the beginning of each school year. The annual
interest rate is 7.3 percent. Your deposits begin one year from
today. You will make your last deposit when your oldest child...

You are saving for the college education of your two children.
They are two years apart in age; one will begin college 15 years
from today and the other will begin 17 years from today. You
estimate your children’s college expenses to be $55,000 per year
per child, payable at the beginning of each school year. The annual
interest rate is 9.2 percent. How much money must you deposit in an
account each year to fund your children’s education? Your...

You are saving for the college education of your two children.
They are two years apart in age; one will begin college 13 years
from today and the other will begin 15 years from today. You
estimate your children’s college expenses to be $39,000 per year
per child, payable at the beginning of each school year. The annual
interest rate is 7.3 percent. Your deposits begin one year from
today. You will make your last deposit when your oldest child...

You would like to save annually for buying a car 6 years from
today. Suppose the first deposit is made today and the last deposit
will be made 5 years from now. Assume the car will cost you $30,000
and your deposits earn you interest at 6% p.a, compounded
annually.
(a) What is your annual deposit amount?
(b) Instead of making annual deposits, you would like to make
your deposit monthly and the bank is happy to pay your interest...

Eight
months from today you plan to deposit $20,000 into an account with
an APR of 5.5% per year with quarterly compounding. In addition,
eleven months from today, you plan to make the first of a series of
semiannual deposits into the same account. Your first deposit will
equal $4000 and subsequent deposits will grow by 0.5% each. You
will make your final deposit five years and five months from today.
How much will be in your account six years...

You plan to make five deposits of $1,000 each, one every 6
months, with the first payment being made in 6 months. You will
then make no more deposits. If the bank pays 7% nominal interest,
compounded semiannually, how much will be in your account after 3
years? Round your answer to the nearest cent.
$
One year from today you must make a payment of $11,000. To
prepare for this payment, you plan to make two equal quarterly
deposits...

To complete your last year in business school and then go
through law school, you will need $30,000 per year for 4 years,
starting next year (that is, you will need to withdraw the first
$30,000 one year from today). Your uncle offers to put you through
school, and he will deposit in a bank paying 3.73% interest a sum
of money that is sufficient to provide the 4 payments of $30,000
each. His deposit will be made today. How...

To complete your last year in business school and then go
through law school, you will need $20,000 per year for 4 years,
starting next year (that is, you will need to withdraw the first
$20,000 one year from today). Your uncle offers to put you through
school, and he will deposit in a bank paying 6.54% interest a sum
of money that is sufficient to provide the 4 payments of $20,000
each. His deposit will be made today.
How...

ADVERTISEMENT

Get Answers For Free

Most questions answered within 1 hours.

ADVERTISEMENT

asked 8 minutes ago

asked 9 minutes ago

asked 21 minutes ago

asked 27 minutes ago

asked 27 minutes ago

asked 43 minutes ago

asked 50 minutes ago

asked 51 minutes ago

asked 55 minutes ago

asked 56 minutes ago

asked 1 hour ago

asked 1 hour ago