Assume it is Fall 2020. Your child is going to start college in Fall 2030. The annual tuition today is $33,000, and it is expected to grow by 3% annually until that year. For simplicity, you may assume that tuition will remain constant at the 2030 rate for the four years that your child attends. You expect to pay this constant tuition in Fall 2030, 2031, 2032, and 2033. Assume a rate of return of 8% a year on your deposits.

What is the expected annual tuition payment when your child begins college? You plan to make 5 equal annual deposits starting today and running through Fall 2024 that will be sufficient to pay the expected tuition. How much should these deposits be? After having made the first 3 deposits as planned, you learn that tuition will actually be $50,000 a year for the four years. Two more of the original planned deposits will not be enough to pay for the four years of tuition. Instead of the last two planned deposits, what amount should the last two deposits be such that the four $50,000 tuition bills are covered? Using the data from Problem #4-20 Part A to answer the question, how much is the annual amortized payment, how much is the annual amortized payment for the 5-year period, and what is the annual amortized payment over the 10-year period?

Textbook, Chapter 4, Problem #4-20 (Amortization Schedule) 2. Set up an amortization schedule for a $25,000 loan to be repaid in equal install- Twents at the end of each of the next 5 years. The interest rate is 10%. b. Hor large must each annual payment be if the loan is for $50,000? Assume that the interest rate remains at 10% and that the loan is still paid off over 5 years. c. How large most each paymeat be if the loan is for $50,000, the interest rate is 10%, and the loan is paid off in equal installments at the end of each of the se 10 years? This loan is for the same amount as the loan in part b, but the pay ments are spread out over twice as many periods. Why are these payments not half as large as the payments on the loan in part b