PVU Savings = Present value of savings less tuition is PVTuition= sum of two components: tuition and savings. 0.06 - 0.03 15, 000 0.06 - 0.02 we need to find the future value of HS and U cash flows. 0.06 -50, 000 Clearly, PVu > PVHS, so you are better off going to the university. (b) To determine how much you will be able to withdraw for those 15 years of retire- ment, we first need to know how much you have available when you retire. That Next, present value of cash flows associated with going to university (U) is the PVu = PVTuition + PVU Savings = -173, 255 + 280, 809 = 107, 554 1.03 -13 = 104, 501 -173, 255 1.064 = 280, 809(when you are 2 5.84106% compounded monthly. will be in 47 years, when you turn 65. (a) Is going to the university worth it? deposit will be in 47 years, when you turn 65. You are facing two alternatives: go straight to work, or go to college. Interest r 3. Let's rewind a few years back. You are 18, and just graduated from high school. If you decide to go to the university, you will have to pay tuition for four years while If you go straight to work, you will be able to put away $5, 000 in a year into your tuition with the first payment in one year. After you graduate in four years, you'll savings account and grow this deposit by 2% every year thereafter. Your last deposit you are studying. You would go to an expensive school and pay $50, 000 a year for start working at a higher paying job that will allow you to save $15, 000 in five years EAR = (1.02361) 12 - 1 = 32.3 23 years old), and this amount will grow by 3% thereafter. Your last