Assuming that costs continue to increase average

Assignment Help Financial Management

Reference no: EM131498942

Suppose that a young couple has just had their first baby and they wish to ensure that enough money will be available to pay for their child's college education. Currently, college tuition, books, fees, and other costs, average $12,500 per year. On average, tuition and other costs have historically increased at a rate of 4% per year.

a. Assuming that costs continue to increase an average of 4% per year, calculate the tuition and other costs for one year for this student in 18 years when she enters college.

b. Assuming that college costs continue to increase an average of 4% per year and that all her college savings are invested in an account paying 7% interest, what should be the amount of money she will need to have available at age 18 to pay for all four years of her undergraduate education?

Reference no: EM131498942

Questions Cloud

Which organization do you think is positioned better : Two of the major competitors in the fast-food industry-Wendys and McDonalds- have positioned themselves differently. Wendys has taken the adult approach.

Available to pay for their childs college education : Suppose that a young couple has just had their first baby and they wish to ensure that enough money will be available to pay for their child's college education

Might these implications change for different industries : A survey listing the most important cultural values of the United States included the following (most important listed first): protecting the family, honesty.

Explain economist paul norths institutional theory as model : Explain economist Paul North's institutional theory as a model for economic reform. Discuss how institutions promote growth based on Douglass North's theory.

Assuming that costs continue to increase average : Assuming that costs continue to increase an average of 4% per year,

Presentation of forensic information : Describe the analysis and presentation of forensic information. Based on your training, you know you will need to include file system analysis

American foreign policy : The late 1890s and early 1900s saw a great deal of change in modern society. Arguably some of the biggest changes came to urban and State level reform.

How might more open communication with employees be benefit : In a survey that asked corporate leaders whether they communicated with their employees about how the economy was impacting their company, 70 percent said no.

Short-term debt increase without pushing its current ratio : How much can its short-term debt (notes payable) increase without pushing its current ratio below 2.0?

User Account

All Pages