Question

In: Accounting

You have expectations that your daughter will attend Columbia University in 25 years and that the cost of an ivy league education will be close to $560,500 (4-year program)

You have expectations that your daughter will attend Columbia University in 25 years and that the cost of an ivy league education will be close to $560,500 (4-year program). You have recently received $65,000, corporate incentive award, to invest in your daughter’s education. What annual rate of return must you earn on your investment to cover your daughter’s future educational expenses?

Solutions

Expert Solution

Answer: 8.72% Annual Rate of return to earn $ 560,500($561,698) with a $ 65,000 investment today

Using the Formula FV=PV(1+r/k)nk we get $ 561,698 in 25 years where interest is compounded quarterly(4 times a year) at an interest rate of 8.72% p.a where PV is $65000 and FV is future value which is $561,698 close to $ 560,500

Tables;

ekkarill92 answered 2 years ago
Next > < Previous

Related Solutions

Your daughter just turned 4 years old. You anticipate she will start University when she turns...
Your daughter just turned 4 years old. You anticipate she will start University when she turns 18. You would like to have funds in a registered education savings plan (RESP) to fund her education at that time. You anticipate she will spend 6 years in university, and it will cost $20,000 per year. She will need the $20,000 at the start of each school year. When she graduates (debt free) you would also like her to have $40,000 for a...
You think that in 15 years, it will cost $226,000 to provide your child a 4-year...
You think that in 15 years, it will cost $226,000 to provide your child a 4-year college education. Will you have enough if you take $69,000 today and invest it for the next 15 years at 5 percent? Round the answer to the nearest cent. Round FV-factor and FVA-factors to three decimal places. __________(Select Yes or No), you will have approximately $________ _______(Select More or Less) than your estimate of $226,000. If you start from scratch, how much will you...
You are now 25 years old, and have just started working. Your salary for this year...
You are now 25 years old, and have just started working. Your salary for this year (i.e., the next 12 months) is $60,000 a year (payable at the end of the year). You expect your salary to increase at the (nominal) rate of 3% per year. You want to retire on your 60 birthday (i.e., 35 years from now). During retirement, you will be happy if you can have $75,000 per year. You expect to live until you are 90...
You have just graduated from the MBA program of a large university, and one of your...
You have just graduated from the MBA program of a large university, and one of your favorite courses was “Today’s Entrepreneurs.” In fact, you enjoyed it so much you have decided you want to “be your own boss.” While you were in the master’s program, your grandfather died and left you $1 million to do with as you please. You are not an inventor and you do not have a trade skill that you can market; however, you have decided...
You have just graduated from the MBA program of a large university, and one of your...
You have just graduated from the MBA program of a large university, and one of your favorite courses was Today’s Entrepreneurs. In fact, you enjoyed it so much you have decided you want to “be your own boss.” While you were in the master’s program, your grandfather died and left you $1 million to do with as you please. You are not an inventor, and you do not have a trade skill that you can market; however, you have decided...
You have just graduated from the MBA program of a large university, and one of your...
You have just graduated from the MBA program of a large university, and one of your favorite courses was “Today’s Entrepreneurs.” In fact, you enjoyed it so much you have decided you want to “be your own boss.” While you were in the master’s program, your grandfather died and left you $1.5 million to do with as you please. You are not an inventor, and you do not have a trade skill that you can market; however, you have decided...
You expect that you will need to replace your furnace in 4 years at a cost...
You expect that you will need to replace your furnace in 4 years at a cost of $15,682. How much must you save today in an account that pays 3.58% APR (compounded monthly) to exactly pay the $15,682 in 4 years?
You plan to retire in year 20 Your retirement will last 25 years starting in year...
You plan to retire in year 20 Your retirement will last 25 years starting in year 21 You want to have $50,000 each year of your retirement. How much would you have to invest each year, starting in one year, for 15 years , to exactly pay for your retirement ,if your investments earn 6.00% APR (compounded annually)?
You plan to retire in year 20 Your retirement will last 25 years starting in year...
You plan to retire in year 20 Your retirement will last 25 years starting in year 21 You want to have $50,000 each year of your retirement. How much would you have to invest each year, starting in one year, for 15 years , to exactly pay for your retirement ,if your investments earn 6.00% APR (compounded annually)? Answers: $21,349 $21,546 $20,930 $20,520
You plan to retire in year 20 Your retirement will last 25 years starting in year...
You plan to retire in year 20 Your retirement will last 25 years starting in year 21 You want to have $50,000 each year of your retirement. How much would you have to invest each year, starting in one year, for 15 years , to exactly pay for your retirement ,if your investments earn 6.00% APR (compounded annually)? a. 21.,349 b. 21, 546 c. 20,520 d. 20,930
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT