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Your younger sister, Barbara, will start college in five years. She has just informed your parents that she wants to go to Eastern University, which
Your younger sister, Barbara, will start college in five years. She has just informed your parents that she wants to go to Eastern University, which will cost $33,000 per year for four years (assumed to come at the end of each year). Anticipating Barbaras ambitions, your parents started investing $2,000 per year five years ago and will continue to do so for five more years. Use 11 percent as the appropriate interest rate throughout this problem. Barbara is now 18 years old (five years have passed), and she wants to get married instead of going to school. Your parents have accumulated the necessary funds for her education. Instead of her schooling, your parents are paying $13,000 for her upcoming wedding and plan to take a year-end vacation costing $6,000 per year for the next 6 years. (Use a Financial calculator to arrive at the answers.) a. How much will your parents have at the end of 6 years to help you with graduate school, which you will start then? (Round the final answer to the nearest whole dollar.) Funds available $ b. You plan to work on a masters and perhaps a Ph.D. If graduate school costs $131,621 per year, approximately how long will you be able to stay in school based on these funds? (Round the final answer to the nearest whole year.) No. of years
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