A man wishes to set aside some money for his daughter’s college education. His goal is to have a bank savings account containing an amount equivalent to $20,000 in today’s dollars at the girl’s 18th birthday. The estimated inflation rate is 8%. If the bank pays 5% compounded annually, what lump sum should he deposit today on the child’s 4th birthday?

Q: What lump sum do parents need to deposit in an account earning 10%, compounded monthly, so that it…

A: Two questions appear on the board. They are unrelated and are not sub parts. Hence, only the first…

Q: Ayesha wants to deposit 300 per year in a bank for the next 10 years. The bank pays annual interest…

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Q: Your brother has decided to ask you for advice about saving up for his teenager's college fund. He…

A: Answer: Calculation of the amount that your brother need to deposit today: The amount that your…

Q: If your parents deposited $15,000 into an account for you when you were born as part of a college…

A: Computation of the amount received on the 18th birthday is shown: Hence, the amount that will be…

Q: On the day his son was born, a father decided to establish a fund for his son's college education.…

A: Annual withdrawal = 200,000 Period of withdrawal = 4 Years Interest rate (r) = 9% Number of annual…

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A: We can define effective interest rate as that rate which we will receive from investing our amount…

Q: Grandparents plan to open an account on their grandchild's birthday and contribute each month until…

A: a) Answer: Annuity due. Annuities are regular periodic payments made over a specified period. When…

Q: When you were born, your parents started to deposit monthly $2,000 in the bank. The bank offers a…

A: FV Ordinary Annuity=C×(1+i)n−1i where, C=cash flow per period i=interest rate=0.1512…

Q: A father, whose dream is to see his son grow up to be an engineer, plans to invest a certain sum…

A: given, Annuity ( A)= $15000 rate (r) =12% n = 9 (10th to 18 th year)

Q: You want to set up a college savings plan for your daughter. She is currently 10 years old and will…

A: An Annuity is a series of payments of fixed amounts and at fixed intervals. These can be of two…

Q: A father wants to set aside money for his 5-year old son's future college education. Money can be…

A: Present Value annuity- The present value of an annuity is the present worth of future outflow from…

Q: On the day his baby was born, a father decided to establish a savings account for the child’s…

A: Given Information: Present Value = $0 Annual Payments = $5,000 Time = 18 years Rate = 8%

Q: A newborn child receives a $7,000 gift toward a college education from her grandparents. How much…

A: Inerest rate (decimal form) = Interest rate100=5%100=0.05   Quarterly interest rate (decimal form)…

Q: A student plans to deposit P1,500 in a bank now and another P3,000 for the next two years. If he…

A: Amount left can be calculated using the formula of the future value.

Q: A father wants to set aside money for his 5-year-old son's future college education. Money can be…

A: Deposit: It is a saving which one earns during his or her earning period and saves the same amount…

Q: Your oldest daughter is about to start kindergarten in a private school. Tuition is $30,000 per…

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Q: A couple is saving for their newborn daughter’s college education. She will need $25,000 per year…

A: An Annuity is a series of payments of fixed amounts and at fixed intervals. These can be of two…

Q: As a savings plan for college, when their son Bob was born, the Wilburs deposited $10,000 in an…

A: People invest certain amount to get an estimated value after a certain period of time. This value is…

Q: Cecilia wants to pay for her daughter's college for four years by banking 20,000 dollars per year.…

A:

Q: Suppose that a young couple has just had their first baby and they wish to ensure that enough money…

A: There is need of proper planning for the future requirements and if you make proper planning on time…

Q: Mr. and Mrs. Maglalang decide to set aside ₱ 500,000 today and place it on a bank savings account…

A: Assuming college debut happens in 18th year, Duration of the fund (n) = 18 years = 72 quarters r =…

Q: A couple wants to begin saving money for their daughter's education. $16,000 will be needed on the…

A: The present value of the annuity is the current worth of a series of cash flows at a certain rate of…

Q: On the day your daughter is born, you deposit $1,000 in a college savings account that earns 8%…

A: Ordinary annuity accepts regular annuity payments at the end of each period which can be annually,…

Q: Suppose that a young couple has just had their first baby and they wish to insure that enough money…

A:

Q: A mother wants to invests 9,000.00 for her sons future education she invests a portion of the money…

A: Solution:- Interest is the return amount on money invested.

Q: What lump sum do parents need to deposit in an account earning 11%, compounded monthly, so that it…

A: Given: Interest rate = 11% Future value = $90,000 Years = 16 Compounding is monthly

Q: You want your daughter to be a millionaire. She is 3 years old today when you deposit $42,000 in an…

A: The number of years required to reach the target can be calculated with the help of future value…

Q: When you were born, your dear old Aunt Minnie promised to deposit $1,000 in a savings account for…

A: Amount of Annuity = $1000 Term = 25 years  Missed annuity : 5,7 and 11 years Current value of…

Q: What lump sum do parents need to deposit in an account earning 10%, compounded monthly, so that it…

A: As per our guidelines we are supposed to answer only one question (if there are multiple questions…

Q: A woman desires to have $400,000 in a savings account when she retires in 20 years. Because of the…

A: The future value of the cash flow is the future worth of a cash flow at a certain rate of interest…

Q: As a savings program toward their child’s college education, parents decide to deposit 100 dollars…

A: A theory that helps to compute the present or future value of the cash flows is term as the TVM…

Q: A couple wants to save for their daughter's college expense. The daughter will enter college eight…

A: Future value is the value of assets at a future date for a given growth rate. It is given as: FV =…

Q: Sean expects to receive $300,000 in 5 years from a trust fund. If a bank loans money at an interest…

A: In the given case, Seam is expected to receive $300,000 in 5 years from a trust fund. He can borrow…

Q: John would like to accumulate $100,000 by the time his son starts college in ten years.  What amount…

A: Given : Future Value =$100,000 Interest Rate = 5% Time = 10 years Compounding frequency per year  i)…

Q: Suppose you make an annual contribution of P9,993 each year to a college fund for a niece. He is 6…

A: Annual contribution (P) = P 9,993 Period from 6th year to 19th year (n) = 13 Annual interest rate…

Q: On his son's fifth birthday, a man decides to deposit a certain amount which will be equivalent to…

A: given, FV = P28000 NOMINAL RATE = 5.5% INFLATION = 8.7% N = ( 18-5) = 13 YEARS

Q: On his son's fifth birthday, a man decides to deposit a certain amount which will be equivalent to…

A: given, FV = 28000 NOMINAL RATE = 512%=5.5% inflation = 8.7% n = 13 years ( 18-5)

Q: How much will Lana have in that account at the end of 8th year?

A: In this case Lana is saving $2,000 at beginning of each year and thus to calculate the amount at end…

Q: A father wishes to provide P4,000 for his son on his 21st birthday. How much should he deposit every…

A: When the deposit is intended to be made every six months, it means that interest rate will be…

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A: Real interest rate is the rate which is adjusted with the expected inflation rate whereas nominal…

Q: A couple wants to set up a college savings account for their grandchild. If the account earns 4.4%…

A: We need to calculate Present value of $50000, using time value of money formulae.

Q: A father wants to set aside money for his son's future college education. Money can be deposited in…

A: The question is based on the concept of Financial Management.

Q: In order to save for her high school graduation, Marie decided to save ₽200 at the end of each…

A: Note: “Since you have asked multiple questions, I will solve the first question for you. If you want…

Q: An electrical engineer who is anticipating paying for his daughter’s college education plans to…

A: Calculate the future value of the deposits by using the EXCEL FV function as follows: Working:…

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A: Annuity means where regular payment is made at the end of regular period and full amount with…

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A: Given: Deposit = $18,000 Period 12 years Interest rate = 7% or 10%

Q: A father wants to set aside money for his 5-year old son's future college education. Money can be…

A: Present Value  The present value is the value of cash flow stream or the fixed lump sum amount at…