Question

Tuition for the undergraduate degree is 10,000 per year and tuition for the masters degree program is 35,000 per year. If the tuition for each year is due at the beginning of the year, how much would you need to have today in order to cover the costs of youreducation? 4% rate of return. starting last year of undergrad with 2 years of masters

Answer #1

Answer: | |||||

Calcualtion of amount you need
today in order to cover the cost of your
education. |
|||||

Year | Cash required | Present value factor @ 4% | Present value | ||

0 | $10,000 | 1.0000 | 10000.00 | ||

1 | $35,000 | 0.9615 | 33653.85 | ||

2 | $35,000 | 0.9246 | 32359.47 | ||

Total | 76013.31 | ||||

So, you would need to have
today $76,013.31 in order to cover the cost of your
education. |

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