Calculate the lump sum, Finance Basics

Your daughter is a beginning freshman in high school. By the time she enters her freshman year in college, you would like to have savings accumulated to pay her tuition for her next four years of college. Assuming the annual tuition is paid at the beginning of the college year and you expect her freshman annual tuition to be $25,000 and to grow at an inflation rate of 4.5% for each of the remaining 3 years, calculate the lump sum required today (beginning high school) to achieve your investment goals (round to nearest dollar). Assume an average 8% annual yield over the entire period. Your daughter will begin college the following fall after high school graduation. (Hint: create a time line to visualize the timing of the cash flows.)

Posted Date: 2/25/2013 2:22:42 AM | Location : United States







Related Discussions:- Calculate the lump sum, Assignment Help, Ask Question on Calculate the lump sum, Get Answer, Expert's Help, Calculate the lump sum Discussions

Write discussion on Calculate the lump sum
Your posts are moderated
Related Questions
Three of these companies have bonds that carry investment - grade ratings. The other 3 companies carry junk - bond ratings. Judging by the information in the table, which 3 compani

What are the Advantages of Listing on Stock Exchange (i) Detailed information about company is available. (ii) Information increases activity of purchase and sale of the sec

Gloria the Investor Gloria is a seasoned sales manager with a very large international company. Although she has a great deal of experience with sales, she has little experience w


Maghrabi Enclosure follows a moderate current asset investment policy, but it is considering whether to shift to a different strategy.  The firm's annual sales are $500,000; its fi

Profitability Index or P.I. P.I. (benefit-cost ratio) = Present value of inflows / Present value of cash outlay Whether P.I. is greater than 1.0, invest and whereas less th

Acceptance Rule of Payback Period or PBP By using PBP method a company such will accept all those ventures whose payback period is less than to set via the management and will

Stock Split and Reverse Split This is whereas a block of shares is broken down into smaller units or shares hence the number of ordinary shares rises and their respective par

From the following cost, production and sales data of Decors Motor Ltd., prepare comparative income statement for three years under (i) absorption costing method, and (ii) marginal

WHat are the expected rates of reimbursement for this time frame for each player ?