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You are planning ahead for anticipated tuition expenses for your child over the next 5 years. You estimate the annual higher education price index rate
You are planning ahead for anticipated tuition expenses for your child over the next 5 years. You estimate the annual higher education price index rate to be 8%, and your expected tuition expenses will increase at that rate. Your personal time value of money is 4%. Current (end of year 0) tuition expenses are $27,700 per year. Assume that expenses are end-of-year payments. Determine the actual dollar amounts for tuition for end of years 1 through 5 Determine the constant dollar amounts for tuition for end of years 1 through 5
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