If it cost $50,000 to attend a public university today, what would it cost to attend that same university 18 years from now assuming that the cost escalated at a rate of 6% per year (annual compounding)?
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If it cost $50,000 to attend a public university today, what would it cost to attend that same university 18 years from now assuming that the cost escalated at a rate of 6% per year (annual compounding)?
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- To provide for university education fees, money needs to be saved today. What single amount is needed to provide for $6,000 in 6 years, $7,000 in 7 years, $8,000 dollars in 8 years and $9,000 dollars in 9 years at a rate of 4.5% per year?Assume the total cost of a university education will be €290,000 when your child enters college in 18 years. You presently have €40,000 to invest. Required: What annual rate of interest must you earn on your investment to cover the cost of your child’s university education? (Round your answer to 2 decimal places (e.g., 32.16).) Annual rate of interest %You estimate that you will need $10,000 for education in 8 years. How much must you put away at the end of each year at 6 percent interest to have the college money ready? Show Time value of money imputs
- Suppose it costs $18,000 per year (in early 2014 dollars) for tuition, room, board, and living expenses to attend a public university in the Southeastern United States. Solve, a. If inflation averages 8% per year, what is the total cost of a four-year college education starting in 2024 (i.e., 10 years later)? b. Starting in January of 2014, what monthly savings amount must be put aside to pay for this four-year college education? Assume your savings account earns 6% per year, compounded monthly (0.5% per month).Northeastern costs approximately $50,000 per year for a four-year program, whether completed in four years or five. Assume that a student’s parents realized 15 years ago that college was going to cost $50,000 per year for four years, and wondered how much they would have to save each year to have the money to pay for the student’s education. The assumption is that payments are made into the college fund each year (as an ordinary annuity), and payments are withdrawn from the fund at the end of the relevant years.The key information for this scenario is as follows: The number of years of contributions is 18. Assume for simplicity that the college payments will be made at the end of years 15, 16, 17, and 18, that is just after each deposit in those years. The interest rate is 10 percent. College costs are $50,000 per year, and are assumed to be the same for each of the four years. Using the key information for the scenario above, how much would the parents have to save each year for…A master of accountancy degree at Central University costs $12,000 for an additional fifth year of education beyond the bachelor’s degree. Assume that all tuition is paid at the beginning of the year. A student considering this investment must evaluate the present value of cash flows from possessing a graduate degree versus holding only an undergraduate degree. Assume that the average student with an undergraduate degree is expected to earn a salary of $50,00 per year (assumed to be paid at the end of the year for 10 years. Assume that the average student with a master of accountancy degree is expected to earn a salary of $66,000 per year (assumed to be paid at the end of the year) for nine years after graduation. Assume a minimum rate of return of 10%. Round to the nearest dollar. Determine the net present value of cash flows from an undergraduate degree. Use the present value of an annuity table appearing in Exhibit 5 of this chapter. Determine the net present value of cash flows…
- A Masters of Accountancy degree at Central University costs $12,000 for an additional fifth year of education beyond the bachelor’s degree. Assume that all tuition is paid at the beginning of the year. A student considering this investment must evaluate the present value of cash flows from possessing a graduate degree versus holding only an undergraduate degree. Assume that the average student with an undergraduate degree is expected to earn an annual salary of $50,000 per year (assumed to be paid at the end of the year) for 10 years. Assume that the average student with a graduate Masters of Accountancy degree is expected to earn an annual salary of $66,000 per year (assumed to be paid at the end of the year) for 9 years after graduation. Assume a minimum rate of return of 10%. (1) Determine the net present value of cash flows from an undergraduate degree. Use the present value table provided below. (2) Determine the net present value of cash flows from a Masters of Accountancy…I have a question about this assignment! Northeastern costs approximately $50,000 per year for a four-year program, whether completed in four years or five. Assume that a student’s parents realized 15 years ago that college was going to cost $50,000 per year for four years and wondered how much they would have to save each year to have the money to pay for the student’s education. The assumption is that payments are made into the college fund each year, and payments are withdrawn from the fund at the end of the relevant years.The key information for this scenario is as follows: The number of years of contributions is 18. The college payments will be made in years 15, 16, 17, and 18. The interest rate is 10 percent. College costs are $50,000 per year and are the same for each of the four years. Using the key information for the scenario above, how much would the parents have to save each year for 18 years to have exactly the amount of money needed to pay the student’s expenses?…Suppose an individual wants to have $200,000 available for her child's education. Find the amount that would have to be invested at annual rate 7%, compounded continuously, if the number of years until college is 6 years.