Your younger sister, Brittany, will start college in five years. She has just informed your parents that she wants to go to Eastern State U., which will cost $34,000 per year for four years (costs assumed to come at the end of each year). Use 12 percent as the appropriate interest rate throughout this problem.
Brittany is now 18 years old (five years have passed), and she wants to get married instead of going to college. Your parents have accumulated the necessary funds for her education.
Instead of funding her schooling, your parents are paying $14,000 for her current wedding and plan to take year-end vacations costing $7,000 per year for the next three years. Use Appendix A and Appendix D.
(a) How much money will your parents have at the end of three years to help you with graduate school, which you will start then? (Round "PV Factor" to 3 decimal places, intermediate and final answer to nearest dollar amount. Omit the "$" sign in your response.)
Funds available $
(b) You plan to work on a master’s and perhaps a PhD. If graduate school costs $33,516 per year, approximately how long will you be able to stay in school based on these funds? (Select the year that is closest to the correct answer and round your answer to the nearest whole number.)
No. of years