Your younger sister, Barbara, will start college in five years. She has just informed your parents that she wants to go to Eastern University, which will cost $34,000 per year for four years (assumed to come at the end of each year). Anticipating Barbara's ambitions, your parents started investing $5,400 per year five years ago and will continue to do so for five more years. Use 12 percent as the appropriate interest rate throughout this problem (for discounting or compounding). How much more will your parents have to invest each year for the next five years to have the necessary funds for Barbara's education? (Use a Financial calculator to arrive at the answer. Do not round intermediate calculations. Round the final answer to the nearest whole dollar.) Investment each year

Your younger sister, Barbara, will start college in five years. She has just informed your parents that she wants to go to Eastern University, which will cost $34,000 per year for four years (assumed to come at the end of each year). Anticipating Barbara's ambitions, your parents started investing $5,400 per year five years ago and will continue to do so for five more years. Use 12 percent as the appropriate interest rate throughout this problem (for discounting or compounding). How much more will your parents have to invest each year for the next five years to have the necessary funds for Barbara's education? (Use a Financial calculator to arrive at the answer. Do not round intermediate calculations. Round the final answer to the nearest whole dollar.) Investment each year

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Your younger sister, Barbara, will start college in five years. She has just informed your parents that she wants to go to Eastern University, which will cost $44,000 per year for four years (assumed to come at the end of each year). Anticipating Barbara's ambitions, your parents started investing $6,400 per year five years ago and will continue to do so for five more years. Use 10 percent as the appropriate interest rate throughout this problem (for discounting or compounding). How much more will your parents have to invest each year for the next five years to have the necessary funds for Barbara's education? (Use a Financial calculator to arrive at the answer. Do not round intermediate calculations. Round the final answer to the nearest whole dollar.) Investment each year $
Your younger sister, Linda, will start college in five years. She has just informed your parents that she wants to go to Hampton University, which will cost $45,000 per year for four years (cost assumed to come at the end of each year). Anticipating Linda’s ambitions, your parents started investing $6,500 per year five years ago and will continue to do so for five more years. Use 11 percent as the appropriate interest rate throughout this problem (for discounting or compounding). How much will your parents have to save each year (A?) for the next five years in addition to the $6,500 they are currently saving to have the necessary funds for Linda's education? Use Appendix C and Appendix D for an approximate answer, but calculate your final answer using the formula and financial calculator methods. (Do not round intermediate calculations. Round your final answer to 2 decimal places.)
You are saving for the college education of your two children. They are two years apart in age; one will begin college 15 years from today and the other will begin 17 years from today. You estimate your children’s college expenses to be $40,000 per year per child, payable at the beginning of each school year. The appropriate interest rate is 7 percent. Your deposits begin one year from today. You will make your last deposit when your oldest child enters college. Assume four years of college for each child. How much money must you deposit in an account each year to fund your children’s education?
Your younger sister, Brittany, will start college in five years. She has just informed your parents that she wants to go to Eastern State U., which will cost $30,000 per year for four years (cost assumed to come at the end of each year). Anticipating Brittany’s ambitions, your parents started investing $5,000 per year five years ago and will continue to do so for five more years. How much more will your parents have to invest each year for the next five years to have the necessary funds for Brittany’s education? Use 10 percent as the appropriate interest rate throughout this problem (for discounting or compounding). Round all values to whole numbers.
Your daughter is currently 10 years old. You anticipate that she will be going to college in 8 years. You would like to have $119,000 in a savings account to fund her education at that time. If the account promises to pay a fixed interest rate of 10% per year, how much money do you need to put into the account today to ensure that you will have $119,000 in 8 years? Your deposit today should be $. (Round to the nearest cent.)
Your friend already has $20,000 in an investment account. In addition to this amount, she is considering investing $5,000 at the end of year 1 with this amount growing at 6% p.a. until the end of year 5. If the interest rate earned by the investment account is expected to be 8% p.a., the total amount she will have accumulated in this account at the end of five years is closest to: Group of answer choices $29,387. $32,776. $62,162. $66,120.
You plan to send your first born child to DePaul for a 4-year degree with 4 annual payments. Your first payment will start in 25 years in the amount of $ 58,982.71 and grow by 9% per year. Assuming a discount rate of 6%. You start saving in one year from now a fixed amount for 20 total deposits. What is the amount of that annual savings deposit in order to save enough to fund the education? Use the $ symbol and round to the nearest thousand dollars. A correct answer would look like $13,000.
Your daughter is 8 years old today. You are worried about paying for her college tuition, which you estimate will be $20,000 per year (after scholarships). You decide to start a college savings fund by depositing an equal amount in the bank at the end of each of the next 10 years. At the end of years 11, 12, 13 and 14, you want to withdraw $20,000 in order to pay for the tuition. An interest rate of 8% APR compounded annually is assumed. How much do you have to deposit at the end of each of the next 10 years in order to pay for the tuition costs?
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When you were born, your parents started to deposit monthly $2,000 in the bank. The bank offers a fixed interest rate of 15 percent. On your 18th birthday, your parents decide to withdraw the money that they deposited to pay for your college tuition. How much money can they expect to withdraw? What is the present value of your end-of-year investment of $1,000 per year, with the first cash flow received three years from today and the last one 10 years from today? Use a discount rate of 12 percent Consider the stock of BIC Company has an annual dividend of $ 3 in 2020. The dividend is expected to grow at a constant rate of 7 percent permanently in 2023. The market requires a 14 percent return on the company. What is the current price of a share of the stock? You have just found the perfect home. However, in order to buy it, you will need to take out a TRL 450,000, 10-year mortgage at an annual rate of 15,50 percent. What will your monthly mortgage payments be? ABC…
Your daughter is currently 10 years old. You anticipate that she will be going to college in 8 years. You would like to have $110,000 in a savings account to fund her education at that time. If the account promises to pay a fixed interest rate of 9% per year, how much money do you need to put into the account today to ensure that you will have $110,000 in 8 years? Your deposit today should be $ (Round to the nearest dollar.)
You want to set up a college savings plan for your daughter. She is currently 10 years old and will go to college at age 18. You assume that when she starts college, she will need at least $100,000 in the bank. How much do you need to save each year in order to have the necessary funds if the current rate of interest is 7%? Assume that end-of-year deposits are made.

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