Question

Mrs. Smith has a 7-year-old son who will go to college at 18 years old. She has to pay the $30,000 tuition fee for each year in college (4 year college). The interest rate is 15% compounded annually. How much does she need to put in the bank each year (1 year from now until her son is 18 years old) to cover all the costs

Answer #1

Mrs. Brown is considering setting up a college fund for her
grandson. Mrs. Brown wants to pay her grandson's tuition fees of
$5,000 each year for four years. Assume that she saves an equal
amount each year, and the first deposit is made one year from now.
Interest rates will remain constant at 8 percent.
How much must Mrs. Brown save each year? Assume her grandson
will go to college in 18 years and tuition fees are paid once a...

Ashley is planning to attend college when she graduates from
high school 7 years from now. She anticipates that she will need
$10,000 at the beginning of each of the four college years to pay
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an arrangement with her father to do the household chores if her
dad deposits $3,500 at the end of each year for the next 7 years in
a bank account paying 8 percent...

Mrs.
Smith is a 75 year old widow who is very active and healthy. She
was brought in to the ED after collapsing at the grocery store.
Mrs. Smith explains to the nurse practitioner she doesn't know what
happened but she has been feeling exhausted and no energy for the
last month. She tells the nurse practitioner, " I must be getting
old, I am slowing down." The nurse practitioner is suspecting there
is more going on than just age....

Yumi's grandparents presented her with a gift of $17,000 when
she was 10 years old to be used for her college education. Over the
next 7 years, until she turned 17, Yumi's parents had invested her
money in a tax-free account that had yielded interest at the rate
of 2.5%/year compounded monthly. Upon turning 17, Yumi now plans to
withdraw her funds in equal annual installments over the next 4
years, starting at age 18. If the college fund is...

Yumi's grandparents presented her with a gift of $22,000 when
she was 9 years old to be used for her college education. Over the
next 8 years, until she turned 17, Yumi's parents had invested her
money in a tax-free account that had yielded interest at the rate
of 4.5%/year compounded monthly. Upon turning 17, Yumi now plans to
withdraw her funds in equal annual installments over the next 4
years, starting at age 18. If the college fund is...

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?...

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...

Your client, Brooke, decides to start saving for her son's
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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...

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 sonâ€™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...

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