Question

. Peter wants to save some money for his daughter Leah’s education. Tuition costs $16000 per...

. Peter wants to save some money for his daughter Leah’s education. Tuition costs $16000 per year in today’s dollars. His daughter was born today and will go to school starting at age 18. She will go to school for 4 years. Peter can earn 8% on his investments and tuition inflation is 5%. How much must Peter save at the end of each year, if he wants to make his last savings payment at the beginning of his daughter’s first year of college?

uneven cash flow steps

Business   Finance   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

Answer is as follows:

Therefore, monthly payment is $2831.08.

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Joann wants to save for her daughter's education. Tuition costs $9,000 per year in today's dollars....
Joann wants to save for her daughter's education. Tuition costs $9,000 per year in today's dollars. Her daughter was born today and will go to school starting at age 18. She will go to school for 4 years. She can earn 12% on her investments and tuition inflation is 6%. How much must she save at the end of each year if she wants to make her last savings payment at the beginning of her daughter's first year of college?...
Holly would like to plan for her daughter's college education. She would like for her daughter,...
Holly would like to plan for her daughter's college education. She would like for her daughter, who was born today, to attend college for 4 years, beginning at age 18. Tuition is currently $10,000 per year and tuition inflation is 7%. Holly can earn an after-tax rate of return of 9.5%. How much must Holly save at the end of each year, if she wants to make the last payment at the beginning of her daughter's first year of college?
Jack wants to figure out how much to save for his daughter’s 4-year college education. She...
Jack wants to figure out how much to save for his daughter’s 4-year college education. She will begin college in 10 years and Jack wants her to attend his alma mater, Auburn University. Currently, Auburn costs approximately $8,000 per year for a 15-hour course load. Given inflation and typical tuition increases, Jack expects these costs to rise at a rate of 2.5% per year. How much does Jack need to save at the end of each year into an account...
Chip and Chip's Spouse would like to save money for their newborn child's education. They would...
Chip and Chip's Spouse would like to save money for their newborn child's education. They would like to plan on $25,000 in todays dollars. Their child was born now and will start College in 18 years. They are planning on their child attending for 4 years. Chip and Chip's Spouse believe they can earn 8.5% on their investments and that tuition inflation will average 4.25% going forward. How much must Chip and Chip's Spouse save per year if they want...
he wants to have a secure university education for his lovely daughter Daisy. His daughter is...
he wants to have a secure university education for his lovely daughter Daisy. His daughter is now 13 years old. She plans to enroll at the University of Professional Studies, Accra in 5 years, and it should take her 4 years to complete her education. Currently, the cost per year (for everything – her food, clothing, tuition, books, transportation, and so forth) is GH¢ 12,000 per year. This cost is expected to remain constant throughout the four-year university education. The...
A couple wants to save for their​ daughter's college expense. The daughter will enter college eight...
A couple wants to save for their​ daughter's college expense. The daughter will enter college eight years from​ now, and she will need$37,000 ​,$37,900​,​ $38,800​,and ​$39,700 in actual dollars for four school years. Assume that these college payments will be made at the beginning of each school year. The future general inflation rate is estimated to be 7​% per​ year, and the annual​ inflation-free interest rate is 6​% What is the market interest rate to use in the​ analysis? The...
Jill would like to plan for her son's college education. She would like for her son,...
Jill would like to plan for her son's college education. She would like for her son, who was born today, to attend college for 5 years, beginning at age 18. Tuition is currently $12,000 per year and tuition inflation is 6%. Jill can earn an after-tax rate of return of 9%. How much must Jill save at the end of each year, if she wants to make the last payment at the beginning of her son's first year of college?...
Jane would like to start saving for the college education of newborn, Matthew, who is a...
Jane would like to start saving for the college education of newborn, Matthew, who is a month old. She decided to send Matthew to Harvard and estimate that the currently it cost $15,000 per year in today’s dollar for tuition. They assume that Matthew will have 4-year college education starting at age 18. The investment rate of return for the savings plan is 8%. Education inflation is expected to be 6% annually. Calculate how much they will need save annually...
Your client, Brooke, decides to start saving for her son's college tuition. Her son was born...
Your client, Brooke, decides to start saving for her son's college tuition. Her son was born today and will go to college at age 18 for four years. Brooke wants to save until her son's first year of college. Given the following information, what is the present value of the total amount that Brooke needs to have saved at the beginning of her son's first year of college? Current tuition: $16,000 Tuition inflation: 6.5% Brooke's investment return: 10% $29,202 $39,010...
Fred and Louise are 38 years old and plan on retiring at age 67 and expect...
Fred and Louise are 38 years old and plan on retiring at age 67 and expect to live until age 95. Fred currently earns $150,000 and they expect to need $100,000 in retirement. Louise is a stay at home mom. They also expect that Social Security will provide $30,000 of benefits in today’s dollars at age 67. He has been saving $17,000 annually in his 401(k) plan. Their daughter, Ann, who was just born, is expected to go to college...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT