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Megan Berry is a freshman at University of Minnesota. She has some financial questions for the next three years of school and beyond. (4 pts)
- Megan Berry is a freshman at University of Minnesota. She has some financial questions for the next three years of school and beyond. (4 pts)
- If Megans tuition, fees and expenses for books this year total $12,000, what will they be during her senior year (three years from now), assuming costs rise 4% annually? (Use Appendix A or one of the links below) _____________________
Equation 1.4 Future Value of a Lump Sum Present Value $1,000.00 i = Interest Rate 8.00% n = Number of Periods 4 Future Value $1,360.49 *For monthly compounding; n = number of months, i = the annual interest rate divided by 12
- If Megans tuition, fees and expenses for books this year total $12,000, what will they be during her senior year (three years from now), assuming costs rise 4% annually? (Use Appendix A or one of the links below) _____________________
- Megan is applying for a scholarship currently valued at $5,000. If she is awarded it at the end of next year, how much is the scholarship worth in todays dollars, assuming inflation of 3%. (Use Appendix A or one of the link in part a) __________________
- Megan is already looking ahead to graduation and a job and she wants to buy a new car not long after graduation (1-3 years). If after graduation, she begins an investment program of $2400 per year in an investment yielding 6%, what will be the value of the fund after 4 years? (Use Appendix A or one of the links in part a)______________ After 6 years? ____________
- Megans Aunt Carol told her she would give Megan $1,000 at the end of each year for the next 3 years to help with her expenses. Assuming an interest rate of 2%, what is the present value of that stream of payments? (Use Appendix A or one of the links in part a) __________________
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