Question
In: Finance
Bob has 3 children, ages 2, 6 and 8. He would like to pay for their...
Bob has 3 children, ages 2, 6 and 8. He would like to pay for their education at a public college, four years for each child beginning at age 18. The annual cost of education is currently $18,000 and has been increasing at 5% and is expected to continue. If his savings for their education expenses will earn 8.5%,
a) What is the NPV of their college educations?
b)Bob plans to save for their education expenses over the next 10 years. If he has $30,000 saved as of today for these expenses, how much must he save at the end of each year?
Solutions
Expert Solution
(a ): NPV of college education of all the three children= $136,283.22
Calculation as below:
(b ):
NPV of college education (as above)= $136,283.22
Amount saved till today= $30,000
Net amount of PV of education expenses= 136283.22-30,000 = $106,283.22
Amount to be saved every year in the next 10 years= $16,198.38
Calculation as below:
jeff jeffy answered 1 year agoRelated Solutions
Julian, age 27 has 2 children, ages 4 and 3, from his firstmarriage. He is...
Julian, age 27 has 2 children, ages 4 and 3, from his first
marriage. He is now married to Margaret. The children live with
their mother, Alice. Julian and Margaret each make $26,000 per year
and have recently bought a house for $100,000, with a $95,000
mortgage. They have the following life, health, and disability
insurance coverage:Policy APolicy BPolicy CInsuredJulianJulianMargaretFace Amount250,00078,00020,000Type20 year level termGroup termGroup termAnnual Premium$250$156$50Who pays premiumTrusteeEmployerEmployerBeneficiaryTrusteeAliceJulianPolicy ownerTrustJulianMargaretHealth Insurance: Julian and Margaret are covered under Julian’s
employer plan,...
The Jameson family have three young children, ages 8, 6 & 2. They live in a...
The Jameson family have three young children, ages 8, 6 & 2.
They live in a home in an urban area adjacent to a local
construction company. The construction company owns multiple
construction vehicles, including several back hoes. The property is
gated and fenced and there are "NO TRESPASSING" signs posted
throughout the property. One day, the Jameson's 8 year old daughter
managed to climb through a hole in the company's fence to play on
the property. While there, she...
Select one of these: Observe young children between the ages of 2-8 and the adults with...
Select one of these:
Observe young children between the ages of 2-8 and the adults
with whom they spend their days. Write me a story: describe ways
you see the children imitating the adults.
Notice how adults respond when children are hurt or upset. Do
you see a difference in response between those who are
knowledgeable about child development and those who are not? Do any
of the adults deny the children's feelings or try to distract them?
What is...
Steve and Rebecca have 2 small children ages 3 and 4. They have moved to the...
Steve and Rebecca have 2 small children ages 3 and 4. They have
moved to the suburbs and bought a house to provide enough space for
their kids to run around and burn energy so that they have time to
binge watch their TV shows. They have a sizable mortgage of
$720,000 on the home. They earn a combined take home salary of
$225,000. They want their kids to pursue post-secondary education
but don’t expect either of the children will...
The ages of 20 dogs in a pet shelter are shown. 5 8 7 6 3...
The ages of 20 dogs in a pet shelter are shown.
5 8 7 6 3
9 4 4 5 8
7 4 7 5 7
3 5 8 4 9
a) Find the mean, the median, and the mode (if any).
b) Graph the data using a histogram or a frequency polygon.
c) Give the five number summary and construct a box and whiskers
plot for this
data
A doctor would like to evaluate whether flu-frequency is different among patients of various ages. He...
A doctor would like to evaluate whether flu-frequency is
different among patients of various ages. He groups his most recent
12 patients into four groups according to age (pediatric, young
adult, older adult, senior), and counts the frequency of their
flu-related visits. Below is his data. Test the hypothesis that flu
frequency is different among pediatric, adult, older adult, and
senior patients using an alpha level of .01.
Pediatric
Young adult
Older adult
Senior
6
2
4
7
4
1...
John and Jackie have 2 children ages 3 and 5. The current annual cost of college...
John and Jackie have 2 children ages 3 and 5. The current annual
cost of college is $25,000. The children will begin college at age
18 and be in college for 4 years. Education inflation is expected
to be 6% and the parent’s portfolio rate of return is 10%. What
would be the lump sum amount the parents need to set aside today to
invest for their children’s education?
$97,256
$112,812
$149,752
$149,961
Bob Nale is the owner of Nale’s Quick Fill. Bob would like to estimate the mean...
Bob Nale is the owner of Nale’s Quick Fill. Bob would like to
estimate the mean number of gallons of gasoline sold to his
customers. Assume the number of gallons sold follows the normal
distribution with a population standard deviation of 1.90 gallons.
From his records, he selects a random sample of 75 sales and finds
the mean number of gallons sold is 5.40.
a.
What is the point estimate of the population mean?
(Round your answer to 2 decimal...
Bob Nale is the owner of Nale’s Quick Fill. Bob would like to estimate the mean...
Bob Nale is the owner
of Nale’s Quick Fill. Bob would like to estimate the mean number of
gallons of gasoline sold to his customers. Assume the number of
gallons sold follows the normal distribution with a population
standard deviation of 2.50 gallons. From his records, he selects a
random sample of 70 sales and finds the mean number of gallons sold
is 7.80.
What is the point estimate of the population mean?
(Round your answer to 2 decimal places.)...
Bob Nale is the owner of Nale’s Quick Fill. Bob would like to estimate the mean...
Bob Nale is the owner of Nale’s Quick Fill. Bob would like to
estimate the mean number of gallons of gasoline sold to his
customers. Assume the number of gallons sold follows the normal
distribution with a population standard deviation of 2.50 gallons.
From his records, he selects a random sample of 55 sales and finds
the mean number of gallons sold is 6.30.
What is the point estimate of the population mean?
(Round your answer to 2 decimal places.)...
ADVERTISEMENT
ADVERTISEMENT
Latest Questions
- JAVASCRIPT: Please create an array of student names and another array of student grades. - Create...
- Topic - Construction: Structural, loads, tension 1.) Explain why pure tension members are the most efficient...
- Procter and Gamble (PG) paid an annual dividend of $ 1.62$1.62 in 2009. You expect PG...
- locate a recent case of online child pornography. Write a summary of the incident and describe...
- #Python 5. Write function called evaluate() that evaluates the following Python expressions or assignments as specified:...
- Suggest journal, research paper link reference. i need this as reference for writing a research with...
- Cryptography is used heavily in internet communications. True or false? Explain
ADVERTISEMENT