Posted by **Alice** on Thursday, October 20, 2011 at 11:13pm.

5. John and Daphne are saving for their daughter Ellen's college education. Ellen just turned 10 (t=0), and she will be entering college 8 years from now (at t=8). College tution and expenses at State U. are currently $14,500 a year, but they are expected to increase at a rate of 3.5% a year. Ellen should graduate in 4 years-if she takes longer or wants to go to graduate school, she will be on her own. Tution and other costs will be due at the begining of each school year (at t=8,9,10, and 11).

So far,John and Daphne hace accumulated $15,000 in their college savings account (at t=0). Their long-run financial olan is to add an additional $5,000 in each of the next 4 years(at t=1,2,3, and 4). Then they plan to make 3 equal annual contributions in each of the following years, t=5,6, and 7. They expect their investment account to earn 9%. How large must the annual payments at t= 5,6, and 7 be to cover Ellen's anticipated college costs?

a. $1,965.21

b. $2,068.64

c. $2,177.51

d. $2,292.12

e. $2,412.76

- Finance -
**Anonymous**, Sunday, October 23, 2011 at 5:03pm
2412.76

- Finance -
**Anonymous**, Saturday, January 21, 2012 at 7:03pm
. John and Daphne are saving for their daughter Ellen's college education. Ellen just turned 10 (t=0), and she will be entering college 8 years from now (at t=8). College tution and expenses at State U. are currently $14,500 a year, but they are expected to increase at a rate of 3.5% a year. Ellen should graduate in 4 years-if she takes longer or wants to go to graduate school, she will be on her own. Tution and other costs will be due at the begining of each school year (at t=8,9,10, and 11).

So far,John and Daphne hace accumulated $15,000 in their college savings account (at t=0). Their long-run financial olan is to add an additional $5,000 in each of the next 4 years(at t=1,2,3, and 4). Then they plan to make 3 equal annual contributions in each of the following years, t=5,6, and 7. They expect their investment account to earn 9%. How large must the annual payments at t= 5,6, and 7 be to cover Ellen's anticipated college costs?

a. $1,965.21

b. $2,068.64

c. $2,177.51

d. $2,292.12

e. $2,412.76

- Finance -
**Anonymous**, Saturday, January 21, 2012 at 7:08pm
5. John and Daphne are saving for their daughter Ellen's college education. Ellen just turned 10 at (t = 0), and she will be entering college 8 years from now (at t = 8). College tuition and expenses at State U. are currently $14,500 a year, but they are expected to increase at a rate of 3.5% a year. Conclusion

- Finance -
**shrestha**, Tuesday, February 28, 2012 at 1:11am
2412

## Answer This Question

## Related Questions

- Finance - Professor Anderson has a daughter who is 3 years old. In 15 years she ...
- Finance - Professor Anderson has a daughter who is 3 years old. In 15 years she ...
- grewal - Don has just received a cash gift of $70,000 from his rich eccentric ...
- LOGIC - Strength of enumerative arguments - #1 Here's my argument: Alice went to...
- LOGIC - Strength of enumerative arguments - #1 Here's my argument: Alice went ...
- Finance - shley is planning to attend college when she graduates from high ...
- finance - Anne is planning to attend college when she graduates from high school...
- Math - Alex has $20, and Ellen has $12. Alex is saving $3 per day, and Ellen is ...
- business - . I have $2,000 that I can put away for my daughter’s college ...
- Business Finance - you are saving for your child's college.. there are 15 years ...

More Related Questions