Assume you are planning how to finance your childs college, Ask an Expert

Finance

Assume you are planning how to finance your child's college education. The child is 1 year old now so there are 17 years to go before your child enters college at age 18. According to your estimates you will need $90,000 in the bank at that time.

a. If you believe you can earn 6% a year, on average, between now and the time your child starts college, how much will you have to invest each year between now and then in order to reach your target?

b. It appears the annual payment required to reach your target is more than you can afford. If the most you can afford to invest each year is $1,200 what average annual rate of return must you earn in order to reach your target?

View complete question

Basic Finance, Finance

Category:- Basic Finance
Reference No.:- M9884192

Have any Question?Write your Review or question?

Related Questions in Basic Finance

You have an opportunity to invest 2500 today and receive

You have an opportunity to invest $2,500 today and receive $3,000 in three years. What would be the return on your investment if you accepted this opportunity? (Round answer to 2 decimal places, e.g. 52.75.) Return on ...

Q1 you invest 272 at the beginning of every year and your

Q1. You invest $272 at the beginning of every year and your friend invests $272 at the end of every year. If you both earn an annual rate of return of 14.00%. a) how much will you have in your account after 40 years? b) ...

As the financial controller for kl incorporated a highly

As the financial controller for KL Incorporated, a highly diversified conglomerate, you are considering the alternative financing plans for the next millennium. Due to the good relationship with the banks, your firm is a ...

Please help me study for a test by helping me with this

Please help me study for a test by helping me with this problem and show your work/formulas so I can see how you got the answer. At the end of the year, the current assets of a firm were $145,660 and the current liabilit ...

Mcconnell corporation has bonds on the market with 185

McConnell Corporation has bonds on the market with 18.5 years to maturity, a YTM of 7.9 percent, a par value of $1,000, and a current price of $1,067. The bonds make semiannual payments. What must the coupon rate be on t ...

1 the following data are given for the allright

1. The following data are given for the Allright Corporation: Initial cost of proposed equipment $75,000 Estimated useful life ...

What are some best practices that can be offered with

What are some best practices that can be offered with respect to scheduling and network diagramming

Question - sports and leisure - the daytona 500 often

Question - Sports and Leisure - The Daytona 500, often referred to as The Great American Race, is a spectacular sporting event, complete with a pre-race show. Jimmie Johnson won this race in 2013, when the mean speed per ...

Can only weak companies issue debentures can you please

Can only weak companies issue debentures? Can you please explain why they can, or cannot?

Question - bad boys inc is evaluating its cost of capital

Question - Bad Boys, Inc. is evaluating its cost of capital. Under consultation, Bad Boys, Inc. expects to issue new debt at par with a coupon rate of 8% and to issue new preferred stock with a $2.50 per share dividend a ...

4,153,160 Questions Asked
13,132 Experts
2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

Recent Questions

Ask Basic Finance Expert