A couple plans to pay their child’s college tuition for 4 years starting 18 years from...

A couple plans to pay their child’s college tuition for 4 years starting 18 years from now. The current annual cost of college is C$7,000, and they expect this cost to rise at an annual rate of 5 percent. In their planning, they assume that they can earn 6 percent annually.

How much must they put aside each year, starting next year, if they plan to make 17 equal payments?

Expert Solution

Formulae

jeff jeffy answered 2 years ago

Mizzy Elliott plans to pay her daughter’s tuition for four years starting eighteen (18) years from...

Mizzy Elliott plans to pay her daughter’s tuition for four years starting eighteen (18) years from now. The current annual cost of college is $7,500 and she expects this cost to rise at an annual rate of 5 percent. She assumes that she can earn 6 percent annually in her planning. How much must Missy put aside each year, starting next year, if she plans to make 17 equal payments?

You anticipate having to pay $30,000 per year for your child’s college education starting 10 years...

You anticipate having to pay $30,000 per year for your child’s college education starting 10 years from now. You plan to finance four years of college by making quarterly deposits in a savings account starting now. The final deposit is made three months prior to the first college payment, for a total of 40 deposits. Each annual college payment is made in full at the beginning of the school year. If the savings account earns 8% per annum convertible quarterly,...

You are planning to save for you child’s college education which will start in 18 years....

You are planning to save for you child’s college education which will start in 18 years. You expect the tuition to be $43,449, each year, in years 18 to 21. If your college savings account pays 5.69% APR compounded annually, how much do you have to deposit in years 1 to 10 to exactly fund the tuition? You are planning to save for your child’s college education which will start in 18 years. You expect tuition to be $57,554 each...

Bart is a junior in college. He plans to invest equal, annualamounts starting 5 years...

Bart is a junior in college. He plans to invest equal, annual amounts starting 5 years from now for 7 consecutive years in order to accumulate a total of $49,000 at the end of 15 years. If the funds earn 8% per year, what is the required amount of each deposit?

Save for your child’s college tuition! Consider the following parameters: Your daughter is a three-year old...

Save for your child’s college tuition! Consider the following parameters: Your daughter is a three-year old She is going to college at age 18 You make $50,000 annually (the current median income in the U.S.). Your spouse also earns this amount. There is no other source of funding. (In other words, you have no additional help from family members, and there are no scholarships available in the future.) Ignore taxes for now. Estimate each input for the time value of...

Your Uncle Paulie comes to you seeking advice on how to pay for college tuition for...

Your Uncle Paulie comes to you seeking advice on how to pay for college tuition for his two boys, Ivan who is 2 and Martin who is 6. He is set on Martin going to his alma mater, where tuition is currently $40,000. He wants Ivan to attend a local public university for 2 years, travel abroad at Ivan’s expense, and then finish his last two years at the local university. Tuition is currently $30,000. Because of the difference in...

You are planning to save for your retirement in 35 years and the college tuition for...

You are planning to save for your retirement in 35 years and the college tuition for your two children. Your current monthly salary is $9,000 per month and you expect your salary to keep pace with inflation. You expect inflation to be a 3.5 percent EAR for the rest of your life. You plan to deposit 12 percent of your salary each month into a retirement account. Additionally, your employer will deposit 4 percent of your salary into the account....

john wishes to pay $1000 a year for 3 years, starting 5 years from today. interest...

john wishes to pay $1000 a year for 3 years, starting 5 years from today. interest rates are forecast at 2% compounded monthly over the next two years and 4% compounded monthly there after. how much must he set aside today?

You are considering investment that is going to pay $1,500 a month starting 20 years from...

You are considering investment that is going to pay $1,500 a month starting 20 years from today for 15 years. If you can earn 8 percent return on any investment, compounded monthly, how much at most are you willing to pay for this investment opportunity? Round to the nearest cent. Do not include any unit (If your answer is $111.11, then type 111.11 without $ sign.)

A client plans to send her child to college starting in the fall of 2038. She...

A client plans to send her child to college starting in the fall of 2038. She estimates that tuition will cost $40,000 per year and that room and board will cost $14,000 per year, with $20,000 payable for tuition and $7,000 payable for room and board on each January 1 and July 1 during the four years in college, starting on July 1, 2038 and ending on January 1, 2042. She can invest in a fund that will pay 6%...

Question