Beginning to plan college savings accounts

Assignment Help Financial Management

Reference no: EM13895636

Susan is beginning to plan college savings accounts for her two children. Her son Bobby is 8 and will begin college in 10 years when he turns 18. Her daughter Mallory is 2 and will begin college in 16 years when she is 18. Susan plans to deposit $10,000 per year starting next year into a joint account that earns 8.0% annually. Her last deposit will occur in the year that Bobby starts school. If Bobby’s schooling costs $25,000 each year for four years, and Mallory’s schooling costs $30,000 each year for four years, will Susan’s plan provide enough money for both her children’s college education? By how much will Susan meet/miss the goal when she quits depositing money in year 10? (Assume schooling costs are paid after the year is completed, i.e. Bobby’s first tuition payment will occur at end of year 11)

Reference no: EM13895636

Questions Cloud

About inflations effect on net present value : Which of the following statements about inflation’s effect on net present value (NPV) is correct? When the selling price and cost per unit are expected to increase at the same rate, forgetting to take inflation into account in a capital budgeting ana..

Criteria from an ethical perspective : Ethical conclusions give the listeners what they really want to hear, and ethical determination are made when thinking about censorship. What kind of criteria from an ethical perspective limit such a broadcast?

What is the proceeds from the short sale-dividend payment : On January 1, you sold short one round lot (that is, 100 shares) of Lowe's stock at $21 per share. On March 1, a dividend of $3 per share was paid. What is the proceeds from the short sale (net of commission)? What is the dividend payment.

Is there value in a low-gi diet? discuss the pros or cons : Is there value in a low-GI diet? Discuss the pros or cons

Beginning to plan college savings accounts : Susan is beginning to plan college savings accounts for her two children. Her son Bobby is 8 and will begin college in 10 years when he turns 18. Her daughter Mallory is 2 and will begin college in 16 years when she is 18.

Find the general solution : For the unlimited population model with y > 1, check that solutions assume the form discussed in the lecture. Find the general solution of the ODE y' = y2.

Model minority myth true : Asian American families have been touted as a "model minority." What does this term mean? Stereotypes can be both true and false in some respects. In what ways is the model minority myth true, and in what ways is it false?

Evaluating purchasing a line of cement mixing trucks : McClellan Cement is evaluating purchasing a line of cement mixing trucks. McClellan can either purchase new trucks that will produce $90,000 per year for seven years, or used trucks that will produce $60,000 per year for seven years.

Development of governmental responsibility for the poor : Discuss the development of governmental responsibility for the poor as it historically evolved in the United States. How did the changing definition of worthy and unworthy poor help to shape this development?

User Account

All Pages