They have to save each year to reach their new goal

Assignment Help Financial Management

Reference no: EM131986736

Assume that your parents wanted to have $70,000 saved for college by your 18th birthday and they started saving on your first birthday. They saved the same amount each year on your birthday and earned 11.5% per year on their investments. a. How much would they have to save each year to reach their goal? b. If they think you will take five years instead of four to graduate and decide to have $ $110,000 saved just in case, how much would they have to save each year to reach their new goal?

Reference no: EM131986736

Questions Cloud

What is the cost of common equity from reinvested earnings : Based on the DCF approach, what is the cost of common equity from reinvested earnings?

Calculate the future value of ten year ordinary annuity : Calculate the future value of a 10 year ordinary annuity-then take that as the present value when calculating a future value in 35 years.

Describe the economic circumstances of the time : Why do you think that the collapse of Storm occurred in late 2008? Describe the economic circumstances of the time and their coincidence with Storm’s collapse.

Hired as consultant to help determine their cost of capital : The firm will not be issuing any new stock. You were hired as a consultant to help determine their cost of capital.

They have to save each year to reach their new goal : how much would they have to save each year to reach their new goal?

Determine the equivalent uniform annual worth : Determine the equivalent uniform annual worth (EUAW) of the equipment at 8% interest. Express your answer in $ to the nearest $10.

Cash for clunkers : Cash for Clunkers. A clunker that travels 12,000 miles a year at 15 mpg uses 800 gallons of gas a year. What is the ROI?

Compute realized rate of return for investor : Compute the realized rate of return for an investor who purchased the bonds when they were issued and held them until they were called.

How company uses tvm in the business environment : Give specific examples of how a company uses TVM in the business environment.

User Account

All Pages