HomeworkLib
Question

Mr. and Mrs. Johnson estimate they need $55,000 to pay for their daughter, Ellen, to attend...

Mr. and Mrs. Johnson estimate they need $55,000 to pay for their daughter, Ellen, to attend college in ten years. They plan to save $250 each month for the goal. How much expected rate of return do they need to earn in order to be able to fund the goal? (Assume they already have saved $10,000 for Ellen s college, and they want to save at the beginning of each month.)"

Please show how to get calculations on TMV calculator

business   finance   
0 0
Add a comment Improve this question Transcribed image text
Next > < Previous
Sort answers by oldest

Homework Answers

Answer #1

Calculating APR on Deposits,

Using TVM Calculation,

I = BEG[PV = -10,000, PMT = -250, FV = 55,000, N = 120]

I = 4.88%

So,

APR = 4.88%

0 0
Add a comment
Know the answer?
Add Answer to:
Mr. and Mrs. Johnson estimate they need $55,000 to pay for their daughter, Ellen, to attend...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions

  • Mr. and Mrs. Johnson estimate they need $50,000 to pay for their daughter, Ellen, to attend...

    Mr. and Mrs. Johnson estimate they need $50,000 to pay for their daughter, Ellen, to attend college in ten years. How much do they need to save each month, if they expect to earn 7% interest per year? (Assume they already have saved $10,000 for Ellen s college, and they want to save at the beginning of each month.) Please show TMV calculations

  • Mr. Parker is creating a college fund for his daughter. He plans to make 13 yearly...

    Mr. Parker is creating a college fund for his daughter. He plans to make 13 yearly payments with the first payment of $4000 today on his daughter’s fifth birthday and to increase each payment by 5%. Also, He would expect to earn a 10% annual return on his investment and his daughter will need four withdrawals from this account to pay for her education beginning when she is 18 (i.e. 18, 19, 20, 21). If the cost of college education...

  • 2. Mr. And Mrs. James would like to need $30,000 per year during their retirement periods...

    2. Mr. And Mrs. James would like to need $30,000 per year during their retirement periods to have a comfortable life. They assume that they will retire in 20 years and expect a 15-year retirement period. They will be able to earn 10% per year during the 15 years retirement period. a) How large a fund will they need when they retire in 20 years to provide the 15-year, $30,000 retirement annuity? b) How much will they need today as...

  • A student is planning to attend college in August 2029; he plans to create a fund...

    A student is planning to attend college in August 2029; he plans to create a fund that will pay for his 4 years of college. The current cost to attend college for the acadmaic year 2014 - 2015 is $35,000 per year. the expeanses have been steadily rising 6.125% each year. The college will nicely allow the 4 years of expenses to paid in full when he starts college. If we assume he can earn 8.4% per annum compunded monthly...

  • 3. How much money will Mr. & Mrs. Ahmad have to deposit per month to allow...

    3. How much money will Mr. & Mrs. Ahmad have to deposit per month to allow Abdullah to attend American University? How much money will have to be deposited per month to allow Abdullah to attend the British University? (HINT: To answer this question you need to consider the costs of ALL four years.) 4. What is the relationship between the amount that must be deposited monthly by the parents and the future increases in both tuition and living expenses?...

  • Mr. and Mrs. Smith own a villa in Palm Jumeirah, Dubai. Mr. Smith is partner in...

    Mr. and Mrs. Smith own a villa in Palm Jumeirah, Dubai. Mr. Smith is partner in a Pharmaceutical Company. Mrs. Smith stays home with their child, Harry, who is age five. Until recently, the Smith's have felt very comfortable with their financial position. After visiting Holborn Assets Ltd., a family financial planner, the couple became concerned that they were spending too much and not putting enough funds aside for both their child's future education needs and their own retirement. Mr....

  • You need $40,000 in ten years for the purchase of a new car for your nephew...

    You need $40,000 in ten years for the purchase of a new car for your nephew who will be graduating college.  You currently have $20,000 saved and want to invest it for ten years at a 6% rate of return. Will you be able to achieve your investment goal in ten years? Answer If not, then how much more would you need to invest today, instead of the $20,000, to accumulate that goal in ten years? Answer If not, and you...

  • Nick plans to retire at age 67, and estimates that $63,600 a year in retirement for...

    Nick plans to retire at age 67, and estimates that $63,600 a year in retirement for 28 years will be needed. That annual amount will be paid out in monthly income checks. To save for retirement, Nick plans to put money every month into a 401k plan at work. If Nick is currently 24, how much will need to be saved each month to meet the retirement goal, assuming the retirement accounts earn an average of 6.8% per year. Pleas...

  • Mr. Donald Heffernan, a 35 years old account manager At Wells Fargo has gross annual income...

    Mr. Donald Heffernan, a 35 years old account manager At Wells Fargo has gross annual income after all deductibles of $85,000. Mrs. Heffernan quit her job at Walmart to take care of their twin kids, Luke and Christine. So Mr. Heffernan is the only income earner at his house hold. Mr. Heffernan is filing income using the following "Married filing jointly" tax rate schedule. Taxable income over Not over Tax rate $0 18,450 10% 18,451 74,900 15% 74,901 151,200 25%...

  • a) Let's say a year of college currently costs $20,000 in today's dollars. If your clients' child is currently 9 years o...

    a) Let's say a year of college currently costs $20,000 in today's dollars. If your clients' child is currently 9 years old and will start college at 18 years of age, how much will the first year of college cost? Assume college expenses inflate at 3.4% per year, and you can earn an annual rate of return of 6.9% on your investments. b) Let's say that when your clients' child starts college, you estimate that annual tuition will be about...

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT