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Your oldest son is about to start kindergarten at a private school. Tuition is $8,000 per...

Your oldest son is about to start kindergarten at a private school. Tuition is $8,000 per year, payable at the beginning of the year. You expect to keep your son in private school through high school, and you expect tuition to increase at a rate of 4% per year over the 13 years of schooling. Calculate the present value of the tuition payments assuming a required rate of return of 7%. (Round to two decimals).

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Answer #1
Year Cashflows PVF at 7% Present Value
0 -8000 1 -8000
1 -8320 0.934579 -7775.7
2 -8652.8 0.873439 -7557.69
3 -8998.91 0.816298 -7345.79
4 -9358.87 0.762895 -7139.84
5 -9733.22 0.712986 -6939.65
6 -10122.6 0.666342 -6745.08
7 -10527.5 0.62275 -6555.97
8 -10948.6 0.582009 -6372.16
9 -11386.5 0.543934 -6193.5
10 -11842 0.508349 -6019.85
11 -12315.6 0.475093 -5851.07
12 -12808.3 0.444012 -5687.02
Present value -88183
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