Your parents have accumulated a $130,000 nest egg. They have been planning to use this money to pay college costs to be incurred by you and your sister, Courtney. However, Courtney has decided to forgo college and start a nail salon. Your parents are giving Courtney $16,000 to help her get started, and they have decided to take year-end vacations costing $8,000 per year for the next four years. Use 8 percent as the appropriate interest rate throughout this problem. Use Appendix A and Appendix D for an approximate answer, but calculate your final answer using the formula and financial calculator methods. a. How much money will your parents have at the end of four years to help you with graduate school, which you will start then? (Round your final answer to 2 decimal places.) Funds available for graduate school b. You plan to work on a master's and perhaps a PhD. If graduate school costs $21,460 per year, approximately how long will you be able to stay in school based on these funds? (Round your final answer to 2 decimal places.) Number of years Appendix A Future value of $1, FVF FV = PV[1 + 1)" Percent Period 5% 10% 1.100 1.210 NO 00 OWN 4% 1.040 1.082 1.125 1.170 1.217 1.265 1.316 1.369 1.423 1.480 1.110 1.232 1.368 1.518 1.685 1.870 2.076 2.305 2.558 2.839 1% 1.010 1.020 1.030 1.041 1.051 1.062 1.072 1.083 1.094 1.105 1.116 1.127 1.138 1.149 1.161 1.173 1.184 1.196 1.208 1.220 1.282 1.348 1.489 1.645 1.050 1.103 1.158 1.216 1.276 1.340 1.407 1.477 1.551 1.629 1.710 1.796 1.886 1.539 2% 1.020 1.040 1.061 1.082 1.104 1.126 1.149 1.172 1.195 1.219 1.243 1.268 1.294 1.319 1.346 1.373 1.400 1.428 1.457 1.486 1.641 1.811 2.208 2.692 1.060 1.124 1.191 1.262 1.338 1.419 1.504 1.594 1.689 1.791 1.898 2.012 2.133 2.261 2.397 3% 1.030 1.061 1.093 1.126 1.159 1.194 1.230 1.267 1.305 1.344 1.384 1.426 1.469 1.513 1.558 1.605 1.653 1.702 1.754 1.806 2.094 2.427 3.262 4.384 3.152 3.498 1.070 1.145 1.225 1.311 1.403 1.501 1.606 1.718 1.838 1.967 2.105 2.252 2.410 2.579 2.759 2.952 3.159 3.380 3.617 3.870 5.427 7.612 14.974 29.457 1.331 1.464 1.611 1.772 1.949 2.144 2.358 2.594 2.853 3.138 3.452 3.797 4.177 4.595 5.054 5.560 6.116 1.080 1.166 1.260 1.360 1.469 1.587 1.714 1.851 1.999 2.159 2.332 2.518 2.720 2.937 3.172 3.426 3.700 3.996 4.316 4.661 6.848 10.063 21.725 46.902 1.090 1.188 1.295 1.412 1.539 1.677 1.828 1.993 2.172 2.367 2.580 2.813 3.066 3.342 3.642 3.970 4.328 4.717 5.142 5.604 8.623 13.268 31.409 74.358 1.601 1.665 1.732 1.801 1.873 1.948 2.026 2.107 2.191 2.666 3.243 4.801 7.107 3.883 1.980 2.540 2.079 2.183 2.292 2.407 2.527 2.653 3.386 4.322 7.040 11.467 4.310 4.785 5.311 5.895 6.544 7.263 8.062 13.585 22.892 65.001 184.57 2.693 2.854 3.026 3.207 4.292 5.743 10.286 18.420 6.727 10.835 17.449 45.259 117.39 Appendix A (concluded) Future value of $1 Period 12% 13% 1.120 1.130 1.254 1.277 1.405 1.443 1.574 1.630 1.762 1.842 1.974 2.082 2.211 2.353 2.476 2.658 2.773 3.004 3.106 3.395 3.479 3.836 3.896 4.335 4.363 4.898 4.887 5.535 5.474 6.254 6.1307.067 6.866 7.986 7.690 9.024 8.613 10.197 9.646 11.523 17.000 21.231 29.960 39.116 93.051 132.78 289.00 450.74 14% 15% 1.140 1.150 1.300 1.323 1.482 1.521 1.689 1.749 1.925 2.011 2.195 2.313 2.502 2.660 2.853 3.059 3.252 3.518 3.707 4.046 4.226 4.652 4.818 5.350 5.492 6.153 6.261 7.076 7.138 8.137 8.137 9.358 9.276 10.761 10.575 12.375 12.056 14.232 13.743 16.367 26.462 32.919 50.950 66.212 188.88 267.86 700.231,083.7 16% 1.160 1.346 1.561 1.811 2.100 2.436 2.826 3.278 3.803 4.411 5.117 5.936 6.886 7.988 9.266 10.748 12.468 14.463 16.777 19.461 40.874 85.850 378.72 1.670.7 Percent 17% 18% 1.170 1.180 1.369 1.392 1.602 1.643 1.874 1.939 2.192 2.288 2.565 2.700 3.001 3.185 3.511 3.759 4.108 4.435 4.807 5.234 5.624 6.176 6.580 7.288 7.699 8.599 9.007 10.147 10.539 11.974 14.129 14.426 16.672 16.879 19.673 19.748 23.214 23.106 27.393 50.658 62.669 111.07 143.37 533.87 7 50.38 2,566. 2 3.927.4 19% 1.190 1.416 1.685 2.005 2.386 2.840 3.379 4.021 4.785 5.696 6.777 8.064 9.596 11.420 13.590 16.172 19.244 22.091 27.252 32.429 77.388 184.68 1.051.7 5,988.9 20% 1.200 1.440 1.728 2.074 2.488 2.986 3.583 4.300 5.160 6.192 7.430 8.916 10.699 12.839 15.407 18.488 22.186 26.623 31.948 38.338 95.396 237.38 1.469.8 9,100.4 25% 1.250 1.563 1.953 2.441 3.052 3.815 4.768 5.960 7.451 9.313 11.642 14.552 18.190 22.737 28.422 35.527 44.409 55.511 69.389 86.736 264.70 807.79 7.523.2 70,065.0 30% 1.300 1.690 2.197 2.856 3.713 4.827 6.276 8.157 10.604 13.786 17.922 23.298 30.288 39.374 51.186 66.542 86.504 112.46 146.19 190.05 705.64 2,620.0 36.119.0 497,929.0 12.330 Appendix D Present value of an annuity of $1, PVC PVA = A Period 3% 0.971 1.913 2.829 1% 0.990 1.970 2.941 3.902 4.853 5.795 6.728 7.652 8.566 9.471 10.368 11.255 12.134 13.004 13.865 14.718 15.562 16.398 17.226 18.046 22.023 25.808 32.835 39.196 2% 0.980 1.942 2.884 3.808 4.713 5.601 6.472 7.325 8.162 8.983 9.787 10.575 11.348 12.106 12.849 13.578 14.292 14.992 15.678 16.351 19.523 22.396 27.355 31.424 3.717 4.580 5.417 6.230 7.020 7.786 8.530 9.253 9.954 10.635 11.296 11.938 12.561 13.166 13.754 14.324 14.877 17.413 19.600 23.115 25.730 4% 0.962 1.886 2.775 3.630 4.452 5.242 6.002 6.733 7.435 8.111 8.760 9.385 9.986 10.563 11.118 11.652 12.166 12.659 13.134 13.590 15.622 17.292 19.793 21.482 5% 0.952 1.859 2.723 3.546 4.329 5.076 5.786 6.463 7.108 7.722 8.306 8.863 9.394 9.899 10.380 10.838 11.274 11.690 12.085 12.462 14.094 15.372 17.159 18.256 Percent 6% 7% 0.943 0.935 1.833 1.808 2.673 2.624 3.465 3.387 4.212 4.100 4.917 4.767 5.582 5.389 6.210 5.971 6.802 6.515 7.360 7.024 7.887 7.499 8.384 7.943 8.853 8.358 9.295 8.745 9.712 9.108 10.106 9.447 10.477 9.763 10.828 10.059 11.158 10.336 11.470 10.594 12.783 11.654 13.765 12.409 15.046 13.332 15.762 13.801 8% 0.926 1.783 2.577 3.312 3.993 4.623 5.206 5.747 6.247 6.710 7.139 7.536 7.904 8.244 8.559 8.851 9.122 9.372 9.604 9.818 10.675 11.258 11.925 12.233 9% 10% 11% 12% 0.917 0.909 0.901 0.893 1.759 1.736 1.713 1.690 2.531 2.487 2.444 2.402 3.240 3.170 3.102 3.037 3.890 3.791 3.696 3.605 4.486 4.355 4.231 4.111 5.033 4.868 4.712 4.564 5.535 5.335 5.146 4.968 5.995 5.759 5.537 5.328 6.418 6.145 5.889 5.650 6.805 6.495 6.207 5.938 7.161 6.814 6.492 6.194 7.487 7.103 6.750 6.424 7.786 7.367 6.982 6.628 8.061 7.606 7.1916.811 8.313 7.824 7.379 6 .974 8.544 8.022 7.5497.120 8.756 8.201 7.702 7.250 8.950 8.365 7.839 7.366 9.129 8.514 7.963 7.469 9.8239.077 8.422 7.843 10.274 9.427 8.694 8.055 10.757 9.7798.951 8.244 10.962 9.915 9.042 8.304 Appendix D (concluded) Present value of an annuity of $1 Period 13% 0.885 1.668 2.361 2.974 3.517 3.998 4.423 4.799 5.132 5.426 5.687 5.918 6.122 6.302 6.462 6.604 6.729 6.840 6.938 7.025 7.330 7.496 7.634 7.675 14% 0.877 1.647 2.322 2.914 3.433 3.889 4.288 4.639 4.946 5.216 5.453 5.660 5.842 6.002 6.142 6.265 6.373 6.467 6.550 6.623 6.873 7.003 7.105 7.133 15% 0.870 1.626 2.283 2.855 3.352 3.784 4.160 4.487 4.772 5.019 5.234 5.421 5.583 5.724 5.847 5.954 6.047 6.128 6.198 6.259 6.464 6.566 6.642 6.661 16% 0.862 1.605 2.246 2.798 3.274 3.685 4.039 4.344 4.607 4.833 5.029 5.197 5.342 5.468 5.575 5.668 5.749 5.818 5.877 5.929 6.097 6.177 6.233 6.246 17% 18% 0.855 0.847 1.585 1.566 2.210 2.174 2.743 2.690 3.199 3.127 3.589 3.498 3.922 3.812 4.207 4.078 4.451 4.303 4.659 4.494 4.836 4.656 4.988 4.793 5.118 4.910 5.2295.008 5.324 5.092 5.405 5.162 5.475 5.222 5.534 5.273 5.584 5.316 5.628 5.353 5.766 5.467 5.829 5.517 5.871 5.548 5.880 5.554 Percent 19% 0.840 1.547 2.140 2.639 3.058 3.410 3.706 3.954 4.163 4.339 4.486 4.611 4.715 4.802 4.876 4.938 4.988 5.033 5.070 5.101 5.195 5.235 5.258 5.262 20% 0.833 1.528 2.106 2.589 2.991 3.326 3.605 3.837 4.031 4.192 4.327 4.439 4.533 4.611 4.675 4.730 4.775 4.812 4.843 4.870 4.948 4.979 4.997 4.999 25% 0.800 1.440 1.952 2.362 2.689 2.951 3.161 3.329 3.463 3.571 3.656 3.725 3.780 3.824 3.859 3.887 3.910 3.928 3.942 3.954 3.985 3.995 3.999 4.000 30% 0.769 1.361 1.816 2.166 2.436 2.643 2.802 2.925 3.019 3.092 3.147 3.190 3.223 3.249 3.268 3.283 3.295 3.304 3.311 3.316 3.329 3.332 3.333 3.333 35% 0.741 1.289 1.696 1.997 2.220 2.385 2.508 2.598 2.665 2.715 2.752 2.779 2.799 2.814 2.825 2.834 2.840 2.844 2.848 2.850 2.856 2.857 2.857 2.857 40% 0.714 1.224 1.589 1.849 2.035 2.168 2.263 2.331 2.379 2.414 2.438 2.456 2.469 2.478 2.484 2.489 2.492 2.494 2.496 2.497 2.499 2.500 2.500 2.500 50% 0.667 1.111 1.407 1.605 1.737 1.824 1.883 1.922 1.948 1.965 1.977 1.985 1.990 1.993 1.995 1.997 1.998 1.999 1.999 1.999 2.000 2.000 2.000 2.000