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guapka [62]
3 years ago
8

Holly would like to plan for her daughter’s college education. She would like for her daughter, who was born today, to attend co

llege for 4 years, beginning at age 18. Tuition is currently $10,000 per year and tuition inflation is 7%. Holly can earn an after-tax rate of return of 10%. How much must Holly save at the end of each year, if she wants to make the last payment at the beginning of her daughter's first year of college?
Business
1 answer:
Ugo [173]3 years ago
4 0

Answer:

Holly must save $2845.81 at the end of each year

Explanation:

first calculate the value of tuition fees at n = 18

Cash flow formula = Tuition × (1+0.07)^{n}

Discounted CF formula = Cash flow ÷ (1+0.10)^{year}

               10.00%              0

Year   Cash flows   Discounted CF

0           33,799.32  33799.32

1          36,165.28  32877.52

2          38,696.84  31980.86

3          41,405.62  31108.66

FV = $129,766.37

PV = 0

N = 18

rate = 10%

using PMT function in Excel

Annual contribution = $2845.81

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Home Journal magazine

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Tradition medium channels are television, radio, and print media such as newspapers and magazines.  The ad for Maybelline age-minimizing appears in a magazine. The  Ladies' Home Journal magazine is the medium for the ad.

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3 years ago
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How can exchange rates change to reduce the wage differential between countries​
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Answer:

The exchange rate is the value for which one currency can be exchanged for another. Thus, for example, 20 Mexican pesos are needed to acquire an American dollar.

Technically, it could happen that a country changes its exchange rate with respect to a hard currency (such as the Dollar or the Euro) through fixed exchange rates, in order to increase the value of the salaries of its citizens, measured in international currencies. For example, if the Mexican government fixed a parity between the dollar and the peso of value 1 to 1, the minimum wage of Mexicans would go from being worth $ 215 to multiplying by 20, that is, to $ 4,300.

Now, in practice, this situation is practically impossible, since it would imply a monetary modification in the country that makes the adjustment, since otherwise it would imply an unprecedented inflationary peak.

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3 years ago
An increase in money supply causes the real interest rate to ________ and the price level to ________ in long-run general equili
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An increase in money supply causes the real interest rate to remain unchanged and the price level to rise in long-run general equilibrium.

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The Government Accounting Office (GAO) announces deep cuts to social security, Medicare, and welfare programs. Which determinant
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Consumer spending

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3 0
3 years ago
Clancy's just paid its annual dividend of $1.48 per share. Analysts expect the stock price to increase by 2.1 percent annually a
Svetlanka [38]

Answer:

Cost of equity = 13.6%

Explanation:

<em>We will work out the cost of equity, using the the dividend valuation model. The model states that the value of a stock is the present value of the future divided discounted at the cost of equity.</em>

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<em>So we substitute </em>

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<em>cross multiplying</em>

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<em>Divide both sides by 13.17 </em>

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Cost of equity = 13.6%

=0.135736522

8 0
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