Evaluate how much will the father have to save

Reference no: EM1343978

A father, concerned about the rapidly rising cost of a college education, is planning a savings program to put his daughter through college. She is 10 years old, plans to enroll at the university 8 years from now, and should take 4 years to complete her education. Currently, the cost per year (for everything-food, clothing, tuition, books, transportation, and so forth) is $8,000, but a 10 percent annual inflation rate in these costs is forecasted. The father's bank account pays 12 percent interest rate, compounded annually. How much will the father have to save each year before the time his daughter starts college in order to put her through school?

Reference no: EM1343978

Questions Cloud

Find current share price : Apocalyptica Corporation pays a constant $7.25 dividend on its stock. The firm will maintain this dividend for the next nine years and will then cease paying dividends forever.

Evaluate what is the size of the annual payment : Evaluate what is the size of the annual payment the family must make if the fund is to supply obrey with above estimates?

Determining size of ethernet mac addresses : Determine the size of Ethernet MAC addresses?

Calculate coupon rate on the bonds : Backwater Corporation has 6% coupon bonds making annual payments with a YTM of 5.5%. The current yield on these bonds is 5.85%.

Evaluate how much will the father have to save : Evaluate how much will the father have to save each year before the time his daughter starts college in order to put her through school?

Explaining social network widgets and resaurant locators : The popularity of Apple's iPhone and Application store has made _____ improtant to advertisers, who see social network widgets, resaurant locators.

Calculate stock price for companies : Red, Inc., Yellow Corporation, and Blue firm each will pay a dividend of $2.85 next year. The growth rate in dividends for all three firms is 5%.

Illustrate what will be the marginal product of capital : If the economy decides to achieve the Golden Rule level of capital also actually reaches it, illustrate what will be the marginal product of capital.

Explain how much money must be saved each year : Explain how much money must be saved each year to accomplish the same retirement income of $80,000 per year?

User Account

All Pages