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guapka [62]
4 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]4 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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Consider the following explanation

Explanation:

1 First he has,reasonably detailed knowledge of the market in question

2.The second general approach is to use advanced statistical analysis to identify the data

3.Author must collect data not only related to financial aid and college graduates but also on the many variables that can effect these variables .

4.Once the data are collected (which is often much more difficult than it sounds!), the author can then use some advanced statistical techniques to estimate the parameters, including one technique called multiple regression analysis.

If the author has done all these above things on the data ,then i think that his conclusion will be correct.

The best solution to the identification problem is  it requires knowledge of the various variables that effect both the financial aid and college graduates so that advanced statistical estimation can be undertaken, In either case, however, knowledge of financial aid and college graduates alone is not sufficient to identify the data and drawing conclusions on the basis of it.

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3 years ago
Normative and positive statements
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Answer:

Positive statement:

It is basically based on target and truth. Moreover, optimistic deliveries are have to be compelled to validate or nullified yet can't correct than

Normative Statement:

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  1. <u>Since the statement 1</u><u> </u>are often proved or contradicted by grouping and evaluating the information, thus this can be a positive statement.
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3 0
3 years ago
Because of the identity equation that relates to net exports, the in U.S. net exports is matched by in U.S. net capital outflow.
Serga [27]

Answer:

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Explanation:

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3 years ago
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Sergeu [11.5K]

Answer:

It is True

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4 0
3 years ago
Willis Rusch recently purchased a 5-pound box of treats for his dog. The total purchase price was $4.87.What was the price per p
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Answer

The cost of the one pound of the box is $0.974.

Explanation:

As given

Willis Rusch recently purchased a 5-pound box of treats for his dog.

The total purchase price was $4.87 .

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Cost of 5- pound box = $4.87

Thus

Price\ per\ pound = \frac{Total\ cost\ of\ 5\ pound\ box}{Total\ box}

Putting the values in the above

Price\ per\ pound = \frac{\$ 4.87}{5}

                                     = $ 0.974

Therefore the cost of the one pound of the bos is $0.974.

8 0
3 years ago
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