What is the present value of the tuition payments

Assignment Help Financial Management

Reference no: EM13913345

Your oldest daughter is about to start kindergarten at a private school. Tuition is $10,000 per year, payable at the beginning of the school year. You expect to keep your daughter in private school through high school. You expect tuition to increase at a rate of 5% per year over the 13 years of her schooling. What is the present value of the tuition payments if the interest rate is 5% per year? How much would you need to have in the bank now to fund all 13 years of tuition?

Reference no: EM13913345

Questions Cloud

What action should you take to capitalize your prediction : The 6-month, 1-yr, 1.5-yr, and 2-yr interest rates are 1.75%, 2.00%, 2.25% and 2.50% with continuous compounding. a. Calculate the present value of $100 in 1.5 years (=18 months). Suppose a bank needs to borrow (not lend) $20 million for 3 months sta..

Determine the normal stress : If the cylinder is loaded by an axial compressive force of 50 kN, determine the total shortening (in mm) in a 600 mm length. Also, determine the normal stress (in MPa) under this load. The modulus of elasticity of cast iron is E = 100 GPa.

Develop a code of ethics for a new online vitamin : Develop a Code of Ethics for a new online vitamin store.

What is the strain of the bar : A bar of circular cross-section is loaded by a compressive force P = 100 kN. The bar has length L = 2.0 m and diameter d = 30 mm. It is made of aluminum alloy with modulus of elasticity E = 73 GPa. What is the strain of the bar? Express the answer..

What is the present value of the tuition payments : Your oldest daughter is about to start kindergarten at a private school. Tuition is $10,000 per year, payable at the beginning of the school year. You expect to keep your daughter in private school through high school. What is the present value of th..

Bonds on the market making annual payments : Essary Enterprises has bonds on the market making annual payments, with ten years to maturity, a par value of $1,000, and selling for $956. At this price, the bonds yield 6.3 percent. What must the coupon rate be on the bonds?

Maxiflow and alaska assuming : Compute the departmental overhead rates using machine hours as the cost driver.Compute a company-wide overhead rate using machine hours as the cost driver.Compute the overhead costs per batch of MaxiFlow and Alaska assuming:

Compare and contrast moral idealism and utilitarianism : Compare and contrast moral idealism and utilitarianism as alternative personal moral philosophies.

No dividends will be paid on the stock : Metallica Bearings, Inc., is a young start-up company. No dividends will be paid on the stock over the next nine years because the firm needs to plow back its earnings to fuel growth. The company will pay a $10 per share dividend 10 years from today ..

User Account

All Pages