Question

In: Finance

Jan wants to plan for her daughter’s education. Her daughter, Rachel was born today and will...

  1. Jan wants to plan for her daughter’s education. Her daughter, Rachel was born today and will go to college at age 18 for five years. Tuition is currently $15,000 per year, in today’s dollars. Jan anticipates tuition inflation of 6% and believes she can earn an 10% return on her investment. How much must Jan save at the end of each year, if she wants to make her last payment at the beginning of her daughter’s first year of college?

    $4,365.48

    $7,334.72

    $3,882.03

    $2,547.54

Solutions

Expert Solution

­SEE THE IMAGE. ANY DOUBTS, FEEL FREE TO ASK. THUMBS UP PLEASE

jeff jeffy answered 2 years ago
Next > < Previous

Related Solutions

a)Mrs Lee wants to set up a saving plan for her daughter’s university education. She makes...
a)Mrs Lee wants to set up a saving plan for her daughter’s university education. She makes deposits of $500 at the beginning of every 6 months, starting on her daughter’s 2nd birthday and continuing for 10 years. 4(a). Answer the following questions regarding this annuity, using an annual interest rate of 7.8% compounded twice a year. (i) What type of annuity is this? (ii) What is the total number of deposits into the account? (iii) What is the interest rate...
Rachel has a new-born daughter, Emma. She meets with her wealth manager at Fidelity to discuss...
Rachel has a new-born daughter, Emma. She meets with her wealth manager at Fidelity to discuss a college fund for her daughter. The manager offers a plan that Rachel saves the same amount of money every year and then the fund will pay for Emma’s college education. Rachel forecasts that Emma will go to a four-year college at age 20, and each year’s college will cost $40000. If Rachel starts to save next year (at Emma’s age 1) and stops...
On the day his daughter is born, Jack leaves her on Earth and departs on a...
On the day his daughter is born, Jack leaves her on Earth and departs on a spaceship to travel around the universe at a constant speed of 0.91c. He returns to Earth on the day of his daughter's 7th birthday. Calculate the duration of the trip as measured by Jack. (Give your answer in years but don't include the units.)
John Rider wants to accumulate $45,000 to be used for his daughter’s college education. He would...
John Rider wants to accumulate $45,000 to be used for his daughter’s college education. He would like to have the amount available on December 31, 2023. Assume that the funds will accumulate in a certificate of deposit paying 8% interest compounded annually. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) Answer each of the following independent questions. Required: 1. If John were...
John Rider wants to accumulate $65,000 to be used for his daughter’s college education. He would...
John Rider wants to accumulate $65,000 to be used for his daughter’s college education. He would like to have the amount available on December 31, 2023. Assume that the funds will accumulate in a certificate of deposit paying 8% interest compounded annually. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) Answer each of the following independent questions. Required: 1. If John were...
Story: "Rice" The daughter of Indian immigrants, Jhumpa Lahiri was born in London in 1967. Her...
Story: "Rice" The daughter of Indian immigrants, Jhumpa Lahiri was born in London in 1967. Her family moved to the United States, where she attended Barnard College and received multiple graduate degrees, including a Ph.D. in Renaissance studies from Boston University. She is the author of three books, including Interpreter of Maladies (1999) and The Namesake (2003), as well as many short stories. Lahiri has won several literary awards, including a Pulitzer Prize and a PEN/Hemingway Award. Her fiction often...
Chlo is planning for her 15 year-old daughter’s university education.  She estimates that 1 year of university...
Chlo is planning for her 15 year-old daughter’s university education.  She estimates that 1 year of university would cost $15,000 in today’s dollars, but will rise with the rate of inflation of 2% year over year.  How much would Chlo need to have accumulated by the time her daughter starts university at the age of 19 provided she attends university for 3 years and will receive funds at the beginning of each year?  Assume an investment rate of 3.6%, compounded monthly
Your new baby was born yesterday. To save for her education, you decide to invest in...
Your new baby was born yesterday. To save for her education, you decide to invest in a 529 plan and will make QUARTERLY contributions until your child enters the great UNLV when she turns 18. That is, you will save for the next 17 years (Or should it be 18 years? Think about it), and the contribution will be made at the END of each quarter. You expect that the 529 plan will return 8.5% per year with quarterly compounding....
Your new baby was born yesterday. To save for her education, you decide to invest in...
Your new baby was born yesterday. To save for her education, you decide to invest in a 529 plan and will make QUARTERLY contributions until your child enters the great UNLV when she turns 18. That is, you will save for the next 17 years (Or should it be 18 years? Think about it), and the contribution will be made at the END of each quarter. You expect that the 529 plan will return 8.5% per year with quarterly compounding....
Lori wants to give her daughter $25,000 in 8 years to start her own business. Lori...
Lori wants to give her daughter $25,000 in 8 years to start her own business. Lori has already saved $5,000 already for this purpose. How much should Lori invest annually, at the beginning of each year, at an annual interest rate of 7%, compounded annually, to have $25,000 in 8 years?
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT