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Problem:

Blake Gray will finish high school in 7 years then wants to study a particular course at university which will take 4 years and cost $19 900 per year, paid at the start of each year. His parents want to pay for the course and they decide to start putting funds aside at a steady rate with the first payment today and continuing annually to the final year of the course. They will deposit the funds into an investment account that earns 4.49% per annum.

Required:

Question: What is the present value of the university course fees?

Question: How much money must his parents save each year starting from today?

Note: Please provide reasons to support your answer.

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Basic Finance, Finance

Category:- Basic Finance
Reference No.:- M91148955

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