If one year of college currently costs $20,000, how much will one year cost in 18 years for a newborn son assuming an in...

Question

Question

If one year of college currently costs $20,000, how much will one year cost in 18 years for a newborn son assuming an inflation rate of 4%?

business finance

Answer 1

Answer #1

solution: FV=PV*(1+i)^n FV=20000*(1.04118) FV PV i Future value Present value inflation rate number of years FV= 40,516.33

Answer 2

Similar Homework Help Questions

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...
A couple would like to create a college fund for their newborn son. They estimate they...

A couple would like to create a college fund for their newborn son. They estimate they will need $150,000 in 18 years. Assume they can obtain a 4% return, how much would they need to invest annually to reach this goal?
If one year of college currently costs $20,000, how much will one year cost in 18...

If one year of college currently costs $20,000, how much will one year cost in 18 years for a newborn son assuming an inflation rate of 4%? Use appendix A-1 feppendix H- Future Value of a Known Lump Sum) 10% 1% 2% 3% 4% 8% 9% 11% 13% 15% 5% 6% 7% 12% 14% 16% 18% 17% 19 % 20% 1.1300 1 1.0100 1.0200 1,0300 1.0600 1.0800 10900 1.1100 1.0400 1.0500 1.0700 1.1000 1.1200 L1400 1,1500 1.1600 1.1700 1.1800 1,1900...

Let's say a year of college currently costs $16,000 in today's dollars. If your clients' child...

Let's say a year of college currently costs $16,000 in today's dollars. If your clients' child is currently 2 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 3.6% per year, and you can earn an annual rate of return of 7.8% on your investments.
Babu Baradwaj is saving for his son's college tuition. His son is currently 11 years old...

Babu Baradwaj is saving for his son's college tuition. His son is currently 11 years old and will begin college in seven years. Babu has an index fund investment worth $7,500 that is earning 9.5 percent annually. Total expenses at the University of Maryland, where his son says he plans to go, currently total $15,000 per year but are expected to grow at roughly 6 percent each year. Babu plans to invest in a mutual fund that will earn 11...
38. Frank and Wanda are planning for their son's education. Tuition currently costs $18,000 per year...

38. Frank and Wanda are planning for their son's education. Tuition currently costs $18,000 per year and is paid in advance and they expect their son to attend college for 4 years. They expect their investments to earn 9.75% per year and inflation to be 2.5% each year. How much must Frank and Wanda invest today to meet their goal.

"Mr. and Mrs. Smith want to start saving for their four-year-old son, Jack, to go to...

"Mr. and Mrs. Smith want to start saving for their four-year-old son, Jack, to go to college. They estimate current college costs for their area to be $20,000 per year, and they estimate that cost will increase at 5% per year. How much should they estimate Jack s first year of college will cost (assuming he starts college at 18)?" Please show how to get TMV calculations to input into calculator.
Jack and Jill have just had their first child. If college is expected to cost $150,000 per year in 18 years, how much sh...

Jack and Jill have just had their first child. If college is expected to cost $150,000 per year in 18 years, how much should the couple begin depositing annually at the end of each of the next 18 years to accumulate enough funds to pay 1 year of tuition 18 years from now? Assume that they can earn a 6% annual rate of return on their investment.
Julio is planning to save for his newborn daughter's college tuition, to be paid in 18...

Julio is planning to save for his newborn daughter's college tuition, to be paid in 18 years. The amount he wishes to have by that time is $65,000. He plans to deposit $2,500 in a bank account every year for 18 years, starting next year. Suppose the account pays 2% interest on deposits, compounded annually. How much would he need to deposit right now, to make up the remaining amount necessary by the end of 18 years?

A newborn child receives a $9,000 gift toward a college education from her grandparents. How much will the $9,000 be wor...

A newborn child receives a $9,000 gift toward a college education from her grandparents. How much will the $9,000 be worth in 18 years if it is invested at 5.4% ompounded quarterly?