How much money will you have to invest today to pay for


You just won the lottery and would like to set some money aside to pay for your child’s education. As of today, the tuition cost is $30,000 per year at the undergraduate level and $55,000 per year for a two-year master’s program. The rate of inflation for educational services is 3.5% annually and you can invest at a fixed nominal interest rate of 7% APR with annual compounding. Your child will enter a 4-year undergraduate program 16 years from today and upon graduation will immediately enroll in a two-year master’s program. Assuming tuition is to be paid at the beginning of the year, find the amount of tuition for years 1-4 of undergraduate education and years 1-2 at the graduate level. How much money will you have to invest today to pay for your child’s education? Show all work and round dollar amounts to the nearest cent.   You must show all your work, including calculator keystrokes if applicable.

Request for Solution File

Ask an Expert for Answer!!
Financial Management: How much money will you have to invest today to pay for
Reference No:- TGS02352230

Expected delivery within 24 Hours