Project #37385 - Financial Analysis

1. CALCULATE THE LUMP SUM NEEDED AT THE BEGINNING OF THE FIRST YEAR OF COLLEGE TO PAY FOR FOUR YEARS AT HARVARD, ASSUMING THAT EACH YEAR COSTS $35000 AND THAT YOUR FUNDS WILL EARN 8% DURING THE COLLEGE YEARS. YOU WILL PULL EACH PAYMENT OUT AT THE BEGINNING OF THE YEAR.

2. CALCULATE THE ANNUAL SAVINGS NEEDED FOR 4 YEARS AT HARVARD IN THE PREVIOUS PROBLEM, IF YOU HAVE 10 YEARS TO SAVE, AND YOU WILL SAVE AT THE END OF EACH YEAR, AND YOUR SAVINGS WILL EARN 8% PER YEAR.

3. THE BOYLES, TOM AND LOUISE HAVE ONE CHILD THELMA AND LOUISE IS PREGNANT, ABOUT TO DELIVER TWINS.  THELMA JUST TURNED THREE YEARS OLD.  COLLEGE TUITION IS CURRENTLY $10,000 PER YEAR.  INFLATION HAS BEEN ABOUT 3% PER YEAR; HOWEVER, COLLEGE TUITION IS EXPECTED TO INCREASE AT 6% PER YEAR.  THE BOYLE'S WANTS TO ESTABLISH A FUND THAT WILL PROVIDE FOR EACH CHILD'S EDUCATION FOR A PERIOD OF FIVE YEARS,  ASSUME THAT EACH CHILD WILL GO TO SCHOOL ON THEIR 18TH BIRTHDAY, THAT TUITION WILL BE PAID AT THE BEGINNIN OF EACHYEAR, AND ANY INVESTMENT FUNDS WILL EARN A RATE EQUIVALENT TO THE S&P 500 INDEX, WHICH IS EXOECTED TO INCREASE AT 8% PER YEAR,

HOW MUCH DO THE BOYKES NEED TODAY TO FULLY FUND THEIR CHILDREN'S EDUCATION?

4.  ASSUMING THE BOYLES DECIDE INSTEAD TO CONTRIBUTE TO A COLLEGE SAVINGS ACCOUNT TO FUND THE CHILDREN'S EDUCATION, HOW MUCH PER YEAR AT THE END OF THE YEAR, DO THE BOYLES NEED TO CONTRIBUTE, ASSUMING THAT THEIR LAST CONTRIBUTION WILL OCCUR WHEN THE TWINS TURN 18 AND THE FUNDS WILL EARN 8% ANNUALLY?

5. IF TOM'S PARENT OFFER TO CONTRIBUTE $10,000 EACH TODAY, PER CHILD, OR A TOTAL OF $60,000 TOWARDS THE CHILDREN'S EDUCATION, HOW MUCH DO THE BOYLES NEED TO CONTRIBUTE PER YEAR AT THE END OF THE YEAR TO COMPLETE THE FUNDING OF THE CHILDREN'S EDUCATION, AGAIN ASSUMING THE LAST PAYMENT IS MADE WHEN THE TWINS TURN 18 AND THE FUNDS WILL EARN 8% ANNUALLY.

6. JOHN HENDRICK WANTS TO PAY ONE HALF OF  THE COLLEGE COSTS FOR HIS DAUGHTER, RUTH. SHE WIL BE ATTENDING A PRIVATE COLLEGE WITH ANNUAL COSTS OF $20,000 TODAY.  RUTH IS 10 YEARS OLD AND WILL BE STARTING COLLLEGE AT 8 YEARS.  IF THESE COSTS ARE EXPECTED TO INCREASE ANNUALLY BY 8% HOW MUCH WILL MR. HENDRICK NEED TO PROVIDE FOR HER FIRST YEAR OF COLLEGE?

 

Subject Mathematics
Due By (Pacific Time) 08/06/2014 12:00 am
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