Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Please help, connect says I am incorrect... A financial planning service offers a college savings program. The plan calls for you to make six annual

Please help, connect says I am incorrect...

A financial planning service offers a college savings program. The plan calls for you to make six annual payments of $13,500 each, with the first payment occurring today, your childs 12th birthday. Beginning on your childs 18th birthday, the plan will provide $27,000 per year for four years.

What return is this investment offering? ________%

My work: Need to round to 2 decimal places:

Amount invested annually 13500 will be = 13500 * future value annuity factor 5 years + 1 = 13500*FVIFA 6,r% = 27000/Present value Interest annuity factor 4,r% What is the investment offering _________%

13500+ 13500*(1+r)^1 +......+13500*(1+r)^5= 27000/(1+r)^1 + .... +27000/(1+r)^4????

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Cases in Finance

Authors: Jim DeMello

3rd edition

1259330476, 1259330478, 9781259352652 , 978-1259330476

More Books

Students also viewed these Finance questions

Question

What is the difference between outlay cost and opportunity cost?

Answered: 1 week ago