Question

A client plans to send a child to college for four years starting 18 years from...

A client plans to send a child to college for four years starting 18 years from now. Having set aside money for tuition, she decides to plan for room and board also. She estimates these costs at $20,000 per year, payable at the beginning of each year, by the time her child goes to college. If she starts next year and makes 17 payments into a savings account paying 5 percent annually, what annual payments must she make?( with formula and not in excel sheet)

Homework Answers

Answer #1

The value of the tuition fee at year 17

Now, with this as the FV, lets find the annual payments for 17 years

The annual payments she must make = $2,744.5048225306

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
A client plans to send her child to college starting in the fall of 2038. She...
A client plans to send her child to college starting in the fall of 2038. She estimates that tuition will cost $40,000 per year and that room and board will cost $14,000 per year, with $20,000 payable for tuition and $7,000 payable for room and board on each January 1 and July 1 during the four years in college, starting on July 1, 2038 and ending on January 1, 2042. She can invest in a fund that will pay 6%...
A couple plans to pay their child’s college tuition for 4 years starting 18 years from...
A couple plans to pay their child’s college tuition for 4 years starting 18 years from now. The current annual cost of college is C$7,000, and they expect this cost to rise at an annual rate of 5 percent. In their planning, they assume that they can earn 6 percent annually. How much must they put aside each year, starting next year, if they plan to make 17 equal payments?
Mathew Weir plans to pay for his son’s college education for 4 years starting 8 years...
Mathew Weir plans to pay for his son’s college education for 4 years starting 8 years from today. He estimates the annual tuition cost at $45,000 per year, when his son starts college. The tuition fees are payable at the beginning of each year. How much money must Matthew invest every year, starting one year from today, for the next seven years? Assume the investment earns 9 percent annually.
3. Nancy just had a new baby boy and plans to send him to college 18...
3. Nancy just had a new baby boy and plans to send him to college 18 years from now. She wants to deposit each winter in an education account which pays 11% (compounded annually) so that her boy will have enough money set aside that he can take out $20,000 at the beginning of each year to pay tuition, room and board, etc., for each of his five-year integrated master degree in finance. How much will Nancy need to deposit...
Your new born child will be starting college in 18 years. You expect your child's college...
Your new born child will be starting college in 18 years. You expect your child's college education to cost $19,270 per year, due at the beginning of each year. How much must you set aside at the end of each year for your child to attend four years of college. You will not make any more deposit after the child turns 18. Assume an interest rate of 9.06%.
Suppose that some parents begin saving for their child’s college education. They currently have 15 years...
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...
A child born today will attend college in 18 years. College expenses today are around $10,000...
A child born today will attend college in 18 years. College expenses today are around $10,000 for tuition (expected to grow at 5 percent annually) and $12,000 for other expenses (expected to grow at 3 percent annually). Use excel to find the total amount expected for college expenses. Provide a column for labels and excel's functions, as well as a column for the numeric values.
Martha wants to start saving for college. She estimates that she will need $50,000 when she...
Martha wants to start saving for college. She estimates that she will need $50,000 when she starts college four years from now. She plans to save $9,500 this year and increase deposits by 5 percent annually (payments at the end of each year). She can earn 7 percent on her savings. Will she meet her savings goal of $50,000 for college four years from now?
A father is now planning a savings program to put his daughter through college. She is...
A father is now planning a savings program to put his daughter through college. She is 13, she plans to enroll at the university in 5 years, and she should graduate in 4 years. Currently, the annual cost (for everything - food, clothing, tuition, books, transportation, and so forth) is $13,000, but these costs are expected to increase by 6% annually. The college requires that this amount be paid at the start of the year. She now has $10,000 in...
Suzanna plans to save for her 4-year school, which starts 6 years from now. Suzanna will...
Suzanna plans to save for her 4-year school, which starts 6 years from now. Suzanna will need to make the first payment 6 years from today. She identifies a savings plan that allows her to earn an interest of 8 percent annually. The current annual expenditure is $7,200 and it is expected to grow by 7 percent annually. How much should Suzanna deposit each year, starting one year from today? Assume that she plans to make 4 payments. PLEASE HELP