Amanda Weet who is six years old has been gifted $100,000 (after-tax) towards a college fund. Her parents do not have the ability to add any other amounts to the fund and a good four-year college education will cost about $71,000 per-year in ten years from now. What rate of return should she earn to be able to withdraw $71,000 at the end of 10th, 11th, 12th, and 13th year respectively. (Hint: IRR problem, draw a time line)
Amanda Weet who is six years old has been gifted $100,000 (after-tax) towards a college fund. Her parents do not have the ability to add any other amounts to the fund and a good four-year college education will cost about $71,000 per-year in ten years from now. What rate of return should she earn to be able to withdraw $71,000 at the end of 10th, 11th, 12th, and 13th year respectively. (Hint: IRR problem, draw a time line)
Chapter3: Income Sources
Section: Chapter Questions
Problem 35P
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Amanda Weet who is six years old has been gifted $100,000 (after-tax) towards a college fund. Her parents do not have the ability to add any other amounts to the fund and a good four-year college education will cost about $71,000 per-year in ten years from now. What
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