Question

In: Finance

Your Aunt Sherry wanted her niece to go to college, so when her niece was born,...

Your Aunt Sherry wanted her niece to go to college, so when her niece was born, Aunt

Sherry decided to invest $4,000 into an ETF that is expected to earn 11% APR. If Aunt Sherry

made all the deposits, what would her niece have in the ETF when she turned 18? What amount

would be available for her niece if Aunt Sherry missed one birthday payment at year 8 because

she was short of funds, but made the investment on all the other birthdays?

Solutions

Expert Solution

jeff jeffy answered 2 years ago
Next > < Previous

Related Solutions

Your niece just started her college career with a major in economics. She is curious as...
Your niece just started her college career with a major in economics. She is curious as to the interrelationship between the success of an economy and the financial markets, concepts, and financial institutions. Accordingly, she has developed a list of questions addressing these issues and has asked that you explain the ideas. What are the financial markets and what purposes do they serve? What are financial intermediaries? How do these intermediaries function in the economy? What is a federal government...
When you were born, your dear old aunt minnie promised to deposit $500 into a savings...
When you were born, your dear old aunt minnie promised to deposit $500 into a savings account bearing a 5% compounded annual rate on each birthday, beginning with your first. You have just turned 21 and want the dough. However, it turns out that dear old (forgetful) aunt minnie made no deposits on your fifth and eleventh birthdays. How much is in the account right now?
Your child was just born and you are planning for his/her college education. Based on your...
Your child was just born and you are planning for his/her college education. Based on your wonderful experience in Managerial Economics you decide to send your child to Binghamton University as well. You anticipate the annual tuition to be $60,000 per year for the four years of college. You plan on making equal deposits on your child’s birthday every year starting today, the day of your child’s birth. No deposits will be made after starting college. The first tuition payment...
Your child was just born and you are planning for his/her college education. Based on your...
Your child was just born and you are planning for his/her college education. Based on your wonderful experience in Advanced Finance you decide to send your child to Binghamton University as well. You anticipate the annual tuition to be $50,000 per year for the four years of college. You plan on making equal deposits on your child’s birthday EVERY OTHER YEAR for the ages one through seventeen inclusive to fund his/her education. Assume the first tuition payment is due in...
Sara wanted to buy a “Dodo” mechanical doll for her three years old niece, Nana. “Dodo”...
Sara wanted to buy a “Dodo” mechanical doll for her three years old niece, Nana. “Dodo” toys were sold at much reduced prises as a sale promotion for two weeks in the Metro supermarket. Sara selected a doll, bearing a “Dodo” label from the display rack and took it to the cashier to whom she wanted it for her three years old niece. The cashier told her that “Dodo” is suitable for her three years old niece. Three days later...
You just had your second child, and you expect her to go to college in 18...
You just had your second child, and you expect her to go to college in 18 yrs. You plan that a four-year college will cost $33,000 each year. The payments are to be made at the beginning of each college year starting at t = 18. Your first child will go to college in 12 years which will cost $25,000 per year with the first payment due at t = 12. You already have $20,000 on an account that pays...
In her will, your aunt set up a trust that is required to pay you the...
In her will, your aunt set up a trust that is required to pay you the sum of $5,000 a year forever with payments starting immediately. However, the news is better. She has specified that this $5,000 should grow at 5% per year. Given an interest rate of 12%, what is the PV of the inheritance? Please include formulas used. Thanks
Your niece is visiting you, and you are serving her ice cream in a conical glass...
Your niece is visiting you, and you are serving her ice cream in a conical glass (conical shape whose bottom is the tip of the cone). The diameter of the opening is 3 inches, and the cone is 6 inches tall. You plan to fill the cone part way to a height h. Your niece requires that you smooth the ice cream so that it lies perfectly flat. Find a formula for the height of ice cream as a function of...
your wonderful parents established a college savings plan for you when you were born. They deposited...
your wonderful parents established a college savings plan for you when you were born. They deposited $50 into the account on the last day of each month. The account has earned 10% compounded monthly. Now you are off to Monash university. What equal amount can they withdraw beginning today (your 18th birthday) and each year for 4 years to spend on your education, assuming that the account now earns 7% annually?
Your 21-year old niece, who is graduating from college next month, asked for your advice –...
Your 21-year old niece, who is graduating from college next month, asked for your advice – should she: A.Invest $5,000 per year into her retirement fund (9 payments) from age 22 – 30? Or B. wait until she turns 31 and invest $5,000 every year through age 65 (35 payments)? please show work :)
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT