You have just entered a two-year part-time Executive MBA. The tuition fee is $15,000 per year payable at the beginning of each year. Before the program you eamed $40, 000 per year. Your expected salary after graduation. is $55, 000 per year. You can invest your money at 8%. Assume that you will work for 30 years after graduation. The salary dif
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You have just entered a two-year part-time Executive MBA. The tuition fee is $15,000 per year payable at the beginning of each year. Before the program you eamed $40, 000 per year. Your expected salary after graduation. is $55, 000 per year. You can invest your money at 8%. Assume that you will work for 30 years after graduation. The salary differential of $15,000 will continue through this period. How much is your EMBA worth?
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- You have just finished your undergraduate degree and you have two career options: Option 1: Accepting a job offer with the starting salary of $75,000 per year (paid at the end of the year) and an annual raise of 2% pa (guaranteed). You will work in this company for 40 years. Option 2: Choosing a graduate program which will cost you $28,000 per year for the next two years (paid at the beginning of each year). Following the graduate school, you can get a job that offers the initial salary of $85,000 (paid at the end of the Year 3) with an annual raise of 3% pa (guaranteed). You will work in this company for 38 years. a. If you use the discount rate of 10% pa, which option is more lucrative for you? b.At what discount rate will you be indifferent between these two career options? (Hint: You need to use the incremental cash flows to answer this question) c. If option 2 (i.e., work after grad school) comes with a signing bonus (paid at the beginning of Year 3), at what signing bonus will…After graduation, you decide that you can pay $203.24 per month extra on your student loan ( standard monthly payment is 302.99), which has a balance of $50,000 and 20 years of monthly payments remaining. The annual interest rate on the loan is 4% How many years early will you be able to pay off the loan? Please answer in excel.You have just entered an MBA program and have decided to pay for your living expenses using a credit card that has no minimum monthly payment. You intend to charge $1000 per month on the card for the next 21 months. The card carries a monthly interest rate of 1%. How much money will you owe on the card 22 months from now, when you receive your first statement post-graduation?
- Suppose you are starting a PhD program. The university has agreed to waive your tuition, cover all of your living expenses, and pay you an additional stipend of $2,000 at the end of each month, as long as you teach one course per semester over the course of five years. If your savings account is able to earn 5.5% per year for the five years that you will be in this program, how much will you have accumulated in your savings account by the end of the program if interest is compounded on a monthly basis? $104,705.67 $137,761.65 $34,899.71 $866,900.74You are meeting with a financial planner to begin saving for retirement. Your starting salary is $65,000 in year one and you expect to receive pay increases at a rate of 3% each year for the first 30 years of your career, then maintain your salary until you retire. Your financial planner advised you to invest 10% of your yearly salary into a retirement account to maintain a similar lifestyle in retirement. You expect to work for the next 40 years. How much will you have in the account when you retire if your retirement account produces an average return of 9% per year?Assume that you will have a 10-year, $20,000 loan to repay when you graduate from college next month. The loan, plus 10 percent annual interest on the unpaid balance, is to be repaid in 10 annual installments of $3,255 each, beginning one year after you graduate. You have accepted a well-paying job and are considering an early settlement of the entire unpaid balance in just three years (immediately after making the third annual payment of $3,255). Prepare an amortization schedule showing how much money you will need to save to pay the entire unpaid balance of your loan three years after your graduation. (Round your answers to the nearest dollar amount. Enter all amounts as positive numbers.) Interest Period Date of Graduation Year 1 Year 2 Year 3 Annual Payment Annual Interest Expense @10% a. Actual net-of-tax interest cost b. Effective interest rate Reduction in Unpaid Balance Unpaid Balance One of the advantages of borrowing is that interest is deductible for income tax purposes. a.…
- Assume that you will have a 10-year, $10,000 loan to repay when you graduate from college next month. The loan, plus 8 percent annual interest on the unpaid balance, is to be repaid in 10 annual installments of $1,490 each, beginning one year after you graduate. You have accepted a wellpaying job and are considering an early settlement of the entire unpaid balance in just three years (immediately after making the third annual payment of $1,490). Prepare an amortization schedule showing how much money you will need to save to pay the entire unpaid balance of your loan three years after your graduation. (Round amounts to the nearest dollar.)Assume that you will have a 10-year, $14,000 loan to repay when you graduate from college next month. The loan, plus 11 percent annual interest on the unpaid balance, is to be repaid in 10 annual installments of $2,377 each, beginning one year after you graduate. You have accepted a well-paying job and are considering an early settlement of the entire unpaid balance in just three years (immediately after making the third annual payment of $2,377). Prepare an amortization schedule showing how much money you will need to save to pay the entire unpaid balance of your loan three years after your graduation. (Round your answers to the nearest dollar amount. Enter all amounts as positive numbers.) Annual Interest Expense @11% Reduction Annual Payment in Unpaid Balance Unpaid Balance Interest Period Date of Graduation Year 1 2.377 Year 2 2,377 Year 3 2,377At 24, you finish college and are fortunate enough to have a job waiting for you. Your first job has a starting salary of $75,000 per year. This salary is expected to increase by $5,000 each year. You decide to start saving for retirement right away. Each year you invest 5% of the year's salary in an account that earns 10% interest, compounded yearly. For simplicity, assume the deposit is made at the END of each year (so if age 24 is t = 0, then the first deposit will be at age 25). If you continue to save in this manner, how much will be in your retirement account immediately after you make the deposit at age 45?
- Upstate University charges $15,000 a year in graduate tuition. Tuition rates are growing at 3.5% each year. You plan to enroll in graduate school in six years. What is your expected graduate tuition in six years?. A student plans to enroll at the university and plans to continue there until earning a PhD degree (a total time of 9 years). If the tuition for the first 4 years will be $7,200 per year and it increases by 5% per year for the next 5 years, what is the present worth of the tuition cost at an interest rate of 8% per year?You have an outstanding student loan with required payments of $500 per month for the next four years. The interest rate on the loan is 9.00% APR (monthly). You are considering making an extra payment of $200 today (i.e., you will pay an extra $200 that you are not required to pay). If you are required to continue to make payments of $500 per month until the loan is paid off, what is the amount of your final payment? What effective rate of retum (expressed as an APR with monthly compounding) have you eamed on the $200? (Note: Be careful not to round any intermediate steps less than six decimal places.) If you are required to continue to make payments of $500 per month until the loan is paid off, what is the amount of your final payment? The final payment is $ (Round to the nearest cent.)