Question

**Please demonstrate !!**

1. Your parents start saving for your sister's college
education. She will begin college when she turns age 18 and will
need $4,000 at that time and at the end of each of the following 3
years. They will make a deposit at the end of this year in an
account that pays 6% compounded annually, and an identical deposit
at the end of each year with the last deposit occurring when she
turns age 18. If an annual deposit of $1,484 will allow them to
reach their goal, **how old is your sister now? Which
dimension of Time Value of Money do you use to solve this
problem?** [Think of the critical juncture, which is age 18
of your sister at which two money series are met and equal.

Answer #1

You plan to start saving for your son's college education. He
will begin collage when he turns 18 years old and will need $4,000
at that time and in each of the following three years. You will
make a deposit at the end of this year in an account that pays 6%
compounded annually as well as an identical deposit at the end of
each year, with the last deposit occurring when he turns 18. If an
annual deposit of...

Today is your birthday and you decide to start saving for
college. You will begin college on your 18th birthday and will need
$10,000 per year at the end of each of the next 4 years (after that
18th birthday - isn't it nice the college lets you pay at the end
of the year!) You will make an identical deposit each year up to
and including the year you begin college. All your money will earn
12% interest including...

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...

1. You want to start saving for your daughter's college
education now. She will enter college at age 18 and will pay fees
of $5,000 at the end of each of the four years. You will start your
savings by making a deposit in one year and at the end of every
year until she begins college. If annual deposits of $3,960.46 will
allow you to reach your goal, how old is your daughter now? Assume
you can earn 6%...

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...

Suppose that some parents begin saving for their child’s college
education. They currently
have 15 years until their child starts college. Current tuition,
room, and board costs $10000
per year. Assume these costs will grow at 7% per year for the next
20 years. Also assume it
will take four years to graduate.
(a) Calculate the costs for tuition, room, and board for these
parents’ child 16, 17, 18, and
19 years from now.
(b) How much would these parents...

You are saving for your child’s college education. Tuition will
be $30,000 each year for four years, with the first tuition payment
due 18 years from today. • How much do you need to deposit today in
a bank account that earns 6% annual interest from now through the
end of your child’s college education so that you will have enough
money to meet all the tuition payments?

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...

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