How much does need to deposit each year

Reference no: EM132056806

Question: A professor has two daughters that he hopes will one day go to college. Currently, in-state students at the local University pay about $21,225.00 per year (all expenses included). Tuition will increase by 3.00% per year going forward. The professor's oldest daughter, Sam, will start college in 16 years, while his youngest daughter, Ellie, will begin in 18 years. The professor is saving for their college by putting money in a mutual fund that pays about 9.00% per year. Tuition payments are at the beginning of the year and college will take 4 years for each girl. (Sam's first tuition payment will be in exactly 16 years)

The professor has no illusion that the state lottery funded scholarship will still be around for his girls, so how much does he need to deposit each year in this mutual fund to successfully put each daughter through college. (ASSUME that the money stays invested during college and the professor will make his last deposit in the account when Sam, the OLDEST daughter, starts college.)

Reference no: EM132056806

Questions Cloud

Considering investing in large baking facility : Scones and More Inc. (SAM), is considering investing in a large baking facility. Perform an APV analysis of the project to determine its NPV.

How much should he or she pay to play : However, the player rolls a 3,4,5, or 6, he or she wins the difference between the number rolled and $2. For the game to be fair, how much should he or she pay

Examine the effect of bring your own device : Determine four advantages and four disadvantages of telecommuting from an IT manager's point of view. Elaborate on each advantage and disadvantage.

What happened on the first 5 turns of the casino game : What happened on the first 5 turns of the casino game tells us nothing about what will happen on the next 5 turns of the casino game.

How much does need to deposit each year : The professor has no illusion that the state lottery funded scholarship will still be around for his girls, so how much does he need to deposit each year.

The presence of corporate taxation : The reason that MM Proposition I does not hold in the presence of corporate taxation is because:

Bound on the error of estimation : Assume that the evaluator has no prior information available to estimate p.

Compute the rental cost for each full month : On September 1, North Hampton Industries signed a six-month lease for office space, Compute the rental cost for each full month

People have a particular disease : Suppose that 1% of all people have a particular disease. A test for the disease is 99% accurate. This means that a person who has the disease

User Account

All Pages