How much should he set aside today to fund his goal

Assignment Help Finance Basics
Reference no: EM132235143

George has been in academia his entire career and wholeheartedly believes that education is the key to success. He has two daughters, Cindy and Susie. Cindy is a model who also believes in education as well as fashion. Cindy has two children, Red and Mauve, who are ages 4 and 2 today. She is also headed to the hospital at this very moment to deliver her third child, who will be named Olive. Susie is an engineer who used to play rugby in college and also believes in education. Her children, Copper and Mercury, are ages 3 and 5 today, respectively. George believes that with $100,000, a student should be able to obtain a great education, even if it is not the exact amount necessary to fund all of a student's time in college. George would like to provide each of his grandchildren with the ability to have $100,000 of purchasing power when they turn 18. Education costs are approximately $30,000 per year at private schools and about $15,000 at public schools. Education costs have been increasing at a consistent rate of 7% per year and are expected to continue, while inflation has been at a steady 3% per year. How much should he set aside today to fund his goal for his grandchildren if he can earn a rate of return of 9%?

Reference no: EM132235143

Eps-pe and mergers

The shareholders of Flannery Company have voted in favor of buyout offer from Stultz Corporation. Information about each firm is given here:

What apr rate should you charge your customers

To offset your overhead, you want to charge your customers an EAR (or EFF%) that is 2% more than the bank is charging you. What APR rate should you charge your customers?

Determine the latest book value per share

Using the resources at your campus or public library or on the Internet, elect any 3 common stocks you like and determine the latest book value per share, earnings per share

What is the cost of equity

The Chicken Coup Restaurant is expected to pay an annual dividend of $2.20 a share next year. The company recently announced that future dividends will increase by 2.8 perce

Calculate the npv for both conveyor belt systems

Both systems are to be depreciated straight-line to zero over their lives and will have zero salvage value. Whichever system is chosen, it will not be replaced when it wears

Discuss the history of us deficit in current accounts

Briefly discuss the history of US deficit in current and trade accounts and recent development in this deficit and how to understand the argument between USA and its major t

How much would the firm save in interest

What if interest rates on the 10 percent loan go up to 15 % in the second year and 18% in the third year? What would be the total interest cost compared to the 12%, three ye

Bond pricing factors and direction of response

Write down the three factors that cause a bond's price to change and what is the predicted direction of change for the bond's price from changes in these factors?

Reviews

Write a Review

 
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd