Present value. Prestigious University is offering a new admission and tuition payment plan for all alumni. On the birth of a?child, parents can guarantee admission to Prestigious if they pay the first?year's tuition.

?

P3-1 3 (Similar 110) 55 Question Help 'O Present value. Prestigious University is offering a new admission and tuition payment plan for all alumni. On the birth of a child, parents can guarantee admission to Prestigious if they pay the first year's tuition. The university will pay an annual rate of return of 6% on the deposited tuition, and a full refund will be available if the child chooses another university. The tuition is expected to be $20,000 a year at Prestigious 18 years from now. What would parents pay today if theyjust gave birth to a new baby and the child will attend college in 18 years? How much is the required payment to secure admission for their child if the interest rate falls to 2%? What would parents pay today if theyjust gave birth to a new baby and the child will attend college in 18 years? $E| (Round to the nearest cent.)