shley is planning to attend college when she graduates from high school 7 years from now. She anticipates that she will need $10,000 at the beginning of each college year to pay for tuition and fees, and have some spending money. Ashley has made an arrangement with her father to do the household chores if her dad deposits $3,500 at the end of each year for the next 7 years in a bank account paying 8 percent interest. Will there be enough money in the account for Ashley to pay for her college expenses? Assume the rate of interest stays at 8 percent during the college years.

Question

shley is planning to attend college when she graduates from high school 7 years from now. She anticipates that she will need $10,000 at the beginning of each college year to pay for tuition and fees, and have some spending money. Ashley has made an arrangement with her father to do the household chores if her dad deposits $3,500 at the end of each year for the next 7 years in a bank account paying 8 percent interest. Will there be enough money in the account for Ashley to pay for her college expenses? Assume the rate of interest stays at 8 percent during the college years.

Answer 1

deposit end of year 7

USD 31,229.8
fees to be paid end of year 7
USD 35,771.0
Joie wouldn't have enough money to cover the tuition fees

Answer 2

Ashley will have $31,229.81 at the end of year 7.

So, dengan harapan la budak2 MBA fast track nak carik jawapan kt sini..tak dapat la..haha

Answer 3

since ashley will need a total of 40,000$ to go to college for four years. then we calculate the future value of her father's annuity payments and compare that number to the 40,000$.

equationA[(1+ k)
n
−1]
FVAn =
k

Answer 4

To determine if there will be enough money in the account for Ashley to pay for her college expenses, we need to calculate the future value of the account at the end of the 7 years.

The formula to calculate the future value of an investment with compound interest is:

FV = PV * (1 + r)^n

Where:
FV = Future Value
PV = Present Value
r = Interest Rate per period
n = Number of periods

In this case, the initial deposit made by Ashley's father ($3,500) at the end of each year for 7 years is the present value (PV). The interest rate (r) is 8% or 0.08. The number of periods (n) is 7.

Using this information, we can calculate the future value (FV) of the account at the end of the 7 years:

FV = $3,500 * (1 + 0.08)^7
FV = $3,500 * (1.08)^7
FV = $3,500 * 1.7189271
FV ≈ $6,018.74

Therefore, the future value of the account after 7 years would be approximately $6,018.74.

Since Ashley needs $10,000 at the beginning of each college year for tuition and fees, and spending money, it means there won't be enough money in the account to cover her college expenses. She would be short by $10,000 - $6,018.74 = $3,981.26 each year.

Thus, there will not be enough money in the account for Ashley to pay for her college expenses based on the arrangement with her father.