HomeworkLib
Question

You are saving for your child's college education. You plan on making a total of six...

You are saving for your child's college education. You plan on making a total of six tuition payments each one-year apart. The annual estimated tuition payment will be made 14-years from today and you estimate that payment will be $50,000. The remaining five-payments will be made from t=15 to t=19. You decide to make 15 yearly contributions into an investment account. The first contribution is made today and your last contribution will be at t=14, you expect your investment account will earn 8% per year. Under this plan how much will you contribute annually?

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

Homework Answers

Answer #1

0 0
Add a comment
Know the answer?
Add Answer to:
You are saving for your child's college education. You plan on making a total of six...
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

  • 1. You are current saving for your son's college expenses (tuition, room/board). She is 10 years...

    1. You are current saving for your son's college expenses (tuition, room/board). She is 10 years old and will begin college in 8 years. Set aside for her education you have a brokerage account with $10,000 fully invested in an equity index fund that is expected to earn 10% per year. Your plan is to send your son to a public school where the expenses are currently (at T = 0) $18,000 per year, however you expect the expenses to...

  • You are currently saving for your spouse's college expenses (tuition, room/board). She is 20 years old...

    You are currently saving for your spouse's college expenses (tuition, room/board). She is 20 years old and will begin college in 8 years. Set aside for his education you have a brokerage account with $10,000 fully invested in an equity index fund that is expected to earn 10% per year. Your plan is to send your wife to a state school where the expenses are currently (at T = 0) $18,000 per year, however, you expect the expenses to grow...

  • You decided to start saving for your child's college tuition. Your child will start college in...

    You decided to start saving for your child's college tuition. Your child will start college in 25 years. There will be 4 annual tuition payments of $30,000 each. The first payment will be 25 years from now. You will start saving one year from now and will put aside the same amount at the end of every year for 25 years. How much do you have to save every year to have enough to pay the tuition payments. Your savings...

  • You are saving for your child's college tuition. Starting from the birth, you deposit $500 into...

    You are saving for your child's college tuition. Starting from the birth, you deposit $500 into an account at the beginning of each month. The account generates 0.5% per month. By the time your child is 18 years old, how much money would you have in the account (assuming there are 18*12=216 payments, i.e there is no payment on the day your child turns 18)?

  • You are saving for the college education of your two children. They are two years apart...

    You are saving for the college education of your two children. They are two years apart in age; one will begin college 15 years from today and the other will begin 17 years from today. You estimate your children’s college expenses to be $40,000 per year per child, payable at the beginning of each school year. The annual interest rate is 7 percent. Your deposits begin one year from today. You will make your last deposit when your oldest child...

  • Jim and Elsie are saving for their granddaughter Amy’s college education. Amy just turned 12 (at...

    Jim and Elsie are saving for their granddaughter Amy’s college education. Amy just turned 12 (at t = 0), and she will be entering college 6 years from now (at t = 6). College tuition and expenses at Sam Houston State University are currently $15,000 a year, but they are expected to increase at a rate of 2% a year. Amy should graduate in 4 years--if she takes longer or wants to go to graduate school, she will be on...

  • John and Daphne are saving for their daughter Ellen's college education. Ellen just turned 10 (at...

    John and Daphne are saving for their daughter Ellen's college education. Ellen just turned 10 (at t = 0), and she will be entering college 8 years from now (att = 8). College tuition and expenses at State U. are currently $14,500 a year, but they are expected to increase at a rate of 3-5% a year. Ellen should graduate in 4 years--if she takes longer or wants to go to graduate school, she will be on her own. Tuition...

  • John and daphne are saving for their daughter ellens college education. So far John and daphne have accumulated $12000

    John and Daphne are saving for their daughter Ellen's college education. Ellen just turned 10 (at t=0) and she will be entering college 8 years from now (at t=8). College tuition and expenses at State U. Are currently $14,500 a year, but they are expected to increase at a rate of 3.5% a year. Ellen should graduate in 4 years - if she takes longer or wants to go to graduate school she will be on her own. Tuition and...

  • Education Plus financial services is offering education savings plan. The plan calls for you to make...

    Education Plus financial services is offering education savings plan. The plan calls for you to make sik annual payments of $5,000 each, with the first payment occurring today. your child's 12th birthday. Beginning on your child's 18th birthday, the plan will provide $10,000 per year for four years. What return is this investment offering? a) 4.61% b) 4.97% c) 5.87% d) 6.49% e) 8.83% (

  • You plan to retire in 30 years and plan on saving $15,000 annually, starting next year,...

    You plan to retire in 30 years and plan on saving $15,000 annually, starting next year, for the next 30 years. You expect to need $120,000 about 18 years from now for college tuition for your recently born daughter which must be paid out of these savings. You expect to live 35 years during retirement (the first retirement payment will be 31 years from today). 1. If you assume an interest rate of 8.15% over the entire period, how much...

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