1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
Alexxx [7]
3 years ago
8

You had your first child recently. You would like to set aside some funds so that your child will be able to attend the Universi

ty of Texas as an undergraduate without taking on any student loans. Total costs of attendance for undergraduate students currently amount to $28,000 per year and are expected to continue to grow at a 2.5% growth rate per year. Assume that the four-year college expenses for the first year of college need to be paid exactly 18 years from today and that the subsequent costs need to be paid at an annual frequency 19, 20, and 21 years from today. You would like to make 18 equal annual payments starting today to your child’s college savings account to be able to cover the expected college costs. The savings are invested in risk-free Treasury securities that offer a return of 2%. How large are the equal annual contributions to the college savings account over the next 18 years?
Business
1 answer:
gayaneshka [121]3 years ago
3 0

Answer:

Equal annual contributions to the college savings account over the next 18 years is : $4,745.6

Explanation:

Suppose the time the child was born is the Beginning of Year 0 (Y0). So, 18 equal contributions need to be made at the beginning of each year from Y0 to Year 17. Denote these cash flow as Annuity 1 which equal: ( C/ 2%) x ( 1.02^18 -1) = 21.4123 x C with C is the equal annual contribution

The tuition fee starting from the beginning of Year 18 end at the Beginning of Year 21 is a growing annuity at 2.5% growth rate. The Value of this annuity ( Annuity 2) discounted to the Beginning of Year 17 calculated as followed:

(28,000 / (2% - 2.5% ) x ( 1 - [( 1+2.5%)/(1+2%)]^4 ) = $110,614

To save enough for college fee, The future value of Annuity 2 must equal the present value of Annuity 2 calculated above.

Thus, we have: 21.4123 x C = 110,614 <=> C = $4,745.6

You might be interested in
Which of the following will improve your bargaining position with customers a. ​The product your team produces has become more c
exis [7]

"There are fewer close substitutes for the product your team supports"  will improve your bargaining position with customers.

<u>Option: B</u>

<u>Explanation:</u>

Bargaining is the procedure which is preferred by citizens not only with street shops but it is famous internationally too, where defense, economic trade deal, etc are signed between two different nations to corporate and shake hand of unity. Bargaining is more effective when one allow seller to know that the party itself have more substitutes if the product is not provided by the seller in appropriate rate.

For an instance, if India need to buy some rolling defense helicopters for nation from Russia but prices are high and United States is providing same material with lower price or may be with better rewards on buying from them.

3 0
3 years ago
Sales price $6.74 per unit
stiks02 [169]

Answer:

Margin of safety = 3190.922902 units rounded off to 3191 units

Explanation:

Margin of safety is the cushion or extra number of units that the business sells over the break even point in units. The break even point is the point where total revenue equals total cost and the business earns no profit or no loss. To calculate the margin of safety in units, we deduct the break even number of units from the budgeted number of units or sales.

Margin of safety = Budgeted units  -  Break even number of units

First we need to calculate the break even in units. The formula for break even in units is,

Break even in units = Fixed cost / (Selling price per unit - Variable cost per unit)

Break even in units = 9376 / (6.74 - 2.33)

Break even in units = 2126.077098 rounded off to 2126 units

Margin of safety = 5317  -  2126.077098

Margin of safety = 3190.922902 units rounded off to 3191 units

7 0
3 years ago
Assume a companys income statefor year 9 is as follows:
Fofino [41]

Answer:

14.91 and 24.77%

Explanation:

The computation of the company interest coverage ratio is shown below:-

Interest coverage ratio = Earning before interest and tax ÷ Interest

= $161,000 ÷ $10,800

= 14.91

Operating profit margin = (Earning before interest and tax ÷ Revenue) × 100

= $161,000 ÷ $650,000 × 100

= 24.77%

Therefore we have applied the above formula and hence option is not available.

6 0
3 years ago
____________________________________ tries to welcome participation by all organizational members and to view each person as val
vladimir2022 [97]

Human Resources Management welcomes participation by all organizational members and views each person as valuable to the organization instead of focusing primarily on productivity

<h3>What is Management?</h3>

This refers to controlling and organizing people and things for better and more effective productivity or output.

Hence, we can see that there are different types of management, and based on this, they have varied characteristics, but the kind of management that focuses on individuals, rather than productivity is human resources.

Read more about human resources here:

brainly.com/question/25443563

#SPJ1

6 0
1 year ago
Productivity may best be defined as
AleksandrR [38]
<span>The answer is C. Productivity is the ratio of outputs to inputs. This answer is correct because productivity is a measure of efficiency, and is not a measure of quantity, profit (revenue), or quality. Productivity is the measure of effectiveness in converting inputs to outputs.</span>
3 0
3 years ago
Read 2 more answers
Other questions:
  • Scientists compare the constant motion and cooperating, flowing rhythmical movement of particles to the idea of dance. Santhanam
    11·1 answer
  • Shaun is a student who has received an academic scholarship to State University. The scholarship paid $14,000 for tuition, $2,50
    11·1 answer
  • B Company switched from the sum-of-the-years-digits depreciation method to straight-line depreciation in 2018. The change affect
    15·1 answer
  • Investors who want to know the amount of cash a company has available for new​ opportunities, such as expanding into a new sales
    9·1 answer
  • Healthy​ Living, a diet​ magazine, collected $ 240,000 in subscription revenue on June 30. Each subscriber will receive an issue
    14·1 answer
  • Test markets are which of the following type of experiment? a. none of these b. controlled experiment c. exploratory experiment
    9·1 answer
  • What is a commodity?
    12·2 answers
  • Consider the following income statement for the Heir Jordan Corporation: HEIR JORDAN CORPORATION Income Statement Sales $47,600
    11·1 answer
  • Developing a pool of concepts to serve as candidates for new products is the __________ stage of the new-product process.
    12·1 answer
  • this type of business is made up of family members and close friends and are not allowed to sell their shares to the public.​
    5·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!