Your cousin is currently 12 years old. She will be going to college in 6 years. Your aunt and uncle would like to have $100,000 in a savings account to fund her education at that time. If the account promises to pay a fixed interest rate of 4.4% per year, how much money do they need to put into the account today to ensure that they will have $100,000 in 6 years?

Your cousin is currently 12 years old. She will be going to college in 6 years. Your aunt and uncle would like to have $100,000 in a savings account to fund her education at that time. If the account promises to pay a fixed interest rate of 4.4% per year, how much money do they need to put into the account today to ensure that they will have $100,000 in 6 years?

Excel Applications for Accounting Principles

4th Edition

ISBN:9781111581565

Author:Gaylord N. Smith

Publisher:Gaylord N. Smith

Chapter27: Time Value Of Money (compound)

Section: Chapter Questions

Problem 6E

See similar textbooks

Similar questions

Your cousin is currently 12 years old. She will be going to college in 6 years. Your aunt and uncle would like to have $90,000 in a savings account to fund her education at that time. If the account promises to pay a fixed interest rate of 4.2% per year, how much money do they need to put into the account today to ensure that they will have $90,000 in 6 years?
Your cousin is currently 13 years old. She will be going to college in 5 years. Your aunt and uncle would like to have $115,000 in a savings account to fund her education at that time. If the account promises to pay a fixed interest rate of 4.2% per year, how much money do they need to put into the account today to ensure that they will have $115,000 in 5 years? The amount they need to put away today is The amount they need to put away today is $______(Round to the nearest cent.)
Your cousin is currently 8 years old. She will be going to college in 10 years. Your aunt and uncle would like to have $95,000 in a savings account to fund her education at that time. If the account promises to pay a fixed interest rate of 4.3% per year, how much money do they need to put into the account today to ensure that they will have $95,000 in 10 years? The amount they need to put away today is $ (Round to the nearest cent.)
Your cousin is currently 13 years old. She will be going to college in 5 years. Your aunt and unclewould like to have $115,000 in a savings account to fund her education at that time. If the accountpromises to pay a fixed interest rate of 3.6% per year, how much money do they need to put into theaccount today to ensure that they will have $115,000 in 5 years?
Your daughter is currently 10 years old. You anticipate that she will be going to college in 8 years. You would like to have $119,000 in a savings account to fund her education at that time. If the account promises to pay a fixed interest rate of 10% per year, how much money do you need to put into the account today to ensure that you will have $119,000 in 8 years? Your deposit today should be $. (Round to the nearest cent.)
Your daughter is currently 10 years old. You anticipate that she will be going to college in 8 years. You would like to have $110,000 in a savings account to fund her education at that time. If the account promises to pay a fixed interest rate of 9% per year, how much money do you need to put into the account today to ensure that you will have $110,000 in 8 years? Your deposit today should be $ (Round to the nearest dollar.)
Your daughter just turned 5 years old. You plan to send her to college beginning on her 18th birthday. You will need to make payments of $8,000 at the beginning of each year for three years. If you can invest in an account that earns an annual effective rate of 4%, how much money will you need to put aside today to cover these payments?
Your parents start saving for your sister's college education. She will begin college at age 18 and will need $4,000 per year at the end of each of the next 4 years. They will make a deposit one year from today in an account which pays 6% compounded annually, and an identical deposit each year including the year she starts college. If a deposit of $1,987 will allow them to reach their goal, how old is your sister now?
You want to set up a college savings plan for your daughter. She is currently 10 years old and will go to college at age 18. You assume that when she starts college, she will need at least $100,000 in the bank. How much do you need to save each year in order to have the necessary funds if the current rate of interest is 7%? Assume that end-of-year deposits are made.
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 6% per year? How much would you need to have in the bank now to fund all 13 years of tuition?
If your daughter is 5 and she plans to go to college or university in Canada when she is 18 years old. You estimate that the four years of college education will cost $15,000 per year. What will you need to deposit into an education fund each year from age 5 until the age of 18 if the interest rate is 6%. As a part of your answer show the interest rate for your calculation.
Your oldest daughter is about to start kindergarten in 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 your 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? The present value is ?