First, you have to calculate the amount of tuition when the student reaches age 18. Do this by multiplying $11,000 by 1.07 each year from age 12 until it reaches age 18. Thus, 7 times.
At age 18: 16,508
At age 19: 17,664
At age 20: 18,900
At age 21: 20,223
Then, we use this formula:
A = F { i/{[(1+i)^n] - 1}}
where A is the monthly deposit each year, F is the half amount of the tuition each year illustrated in the first part of this solution, n is the number of years lapsed.
At age 18:
A = (16508/2) { 0.04/{[(1+0.04)^6] - 1}} = $1,244.389 deposit for the 1st year
Ate age 19
A = (17664/2) { 0.04/{[(1+0.04)^7] = $1,118 deposit for the 2nd year
At age 20:
A = (18900/2) { 0.04/{[(1+0.04)^8] = $1,025 deposit for the 3rd year
At age 21:
A = (18900/2) { 0.04/{[(1+0.04)^8] = $955 deposit for the 4th year
True. This demonstrates that buyer has confidence on buying products that are branded. She has trust that the product can satisfy her because the brand already earned a reputation in its field. It also shows that she passed scrutiny on the bought product.
Answer:
Tom Busby
His annual payment will be:
= $4,091.64
Explanation:
a) Data:
Loan = $20,000
Interest on loan for 4 years = 8% per annum
Amount of loan after 4 years = $27,200 ($20,000 * 1.360)
Payment period = 12 years
Interest rate during payment period = 11%
b) From online finance calculator:
You will need to pay $4,091 every year for 12 years to payoff the debt at 11% interest.
Monthly Payment $340.97
Annual Payment $4,091.64
Time Required to Clear Debt 12.00 years
Total of 144 or 12 Payments = $49,099.25
Total Interest $21,899.25
