Question

15 years from now, your 2-year old son will be attending Harvard. You have determined he will need $85,000 per year for tuition and living expenses. In 15 years, you will give him a lump sum payment for the entire amount he will need, assuming that he will be able to invest the money not yet needed at 4.5% interest. You have found an investment opportunity that will yield an annual return of 6.5% on your monthly payments. How much will you have to invest each month to give your son the money he needs for his education (assume his first year at Harvard is Year 0, and his final year is Year 3)? Answer using excel formulas

Answer #1

**Formulae**

15 years from now, your 2-year old son will be attending
Harvard. You have determined he will need $85,000 per
year for tuition and living expenses. In 15 years, you
will give him a lump sum payment for the entire amount he will
need, assuming that he will be able to invest the money not yet
needed at 4.5% interest. You have found an investment
opportunity that will yield an annual return of 6.5% on your
monthly payments. How much will you have to...

15 years from now, your 2-year old son will be attending
Harvard. You have determined he will need $85,000 per year for
tuition and living expenses. In 15 years, you will give him a lump
sum payment for the entire amount he will need, assuming that he
will be able to invest the money not yet needed at 4.5% interest.
You have found an investment opportunity that will yield an annual
return of 6.5% on your monthly payments. How much...

15 years from now, your 2-year old son will be attending
Harvard. You have determined he will need $70,000 per year for
tuition and living expenses. In 15 years, you will give him a lump
sum payment for the entire amount he will need, assuming that he
will be able to invest the money not yet needed at 5% interest. You
have found an investment opportunity that will yield an annual
return of 7% on your monthly payments. How much...

Your client has a 10-year old son who will be entering college
in 8 years. Your client estimates college costs to be $16,000,
$17,000, $18,000 and $19,000 payable at the beginning of each of
the son’s four years in college. Your client expects to have $4,000
available when he turns 15 to help defray his college expenses. How
much must your client save at the end of each year for the next 8
years to have enough savings to pay...

Michelle wishes to establish a university fund for her son who
is currently 8 years old.
Required:
a. If her son will need a monthly income of $900, how much does
he need to be in place at the start of his university life (ie
start of first-year) so that the $900 per month is achievable?
Assuming that the interest over the three years while her son is at
university is 6%p.a. compounded monthly and he is paid the $900...

Michelle wishes to establish a university fund for her son who
is currently 8 years old.
Required:
a. If her son will need a monthly income of
$900, how much does he need to be in place at the start of his
university life (ie start of first-year) so that the $900 per month
is achievable? Assuming that the interest over the three
years while her son is at university is 6%p.a. compounded
monthly and he is paid the $900...

You have your choice of two investment accounts. investment a is
a 15-year annuity that features end-of-month 1175 payments and has
a rate of 6.4 percent compounded monthly. investment b is a
lump-sum investment with a 7 percent continuously compounded rate,
also good for 15 years. how much money would you need to invest in
b today for it to be worth as much as investment a 15 years from
now?

3-part question. Five years from now you would like to have $25,000
for a down payment on a home. Assuming you could earn 9% interest,
how much money would you need to invest today as a lump sum to meet
your goal? How much money would you have to invest at the end of
each year to meet your goal? How much would you need if you
invested the payments at the beginning of each year with the first
payment...

What is the present value of $200 to be received two years from
now, with an interest rate of 5%?
You deposit $2000 today at 6% interest. How much will you have
in 5 years?
You invest $5,000 today. You will earn 8% interest. How much
will you have in 4 years?
You have $450,000 to invest. If you think you can earn 7%, how
much could you accumulate in 10 years?
You deposit $300 each year for 15 years...

Q1-You have decided to start saving money for your future. What
is the future value of a 14-year annuity of $2,200 per year,
assuming that you make your first payment today and the interest
rate is 12 percent? (Enter your answer as a positive number rounded
to 2 decimal places.)
Q2-You need to have $24,856 available at the end of 9 years. How
much to do you have invest each year, starting at the end of this
year, for 9...

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