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
Orlov [11]
3 years ago
10

Your daughter will start college one year from today, at which time the first tuition payment of \$58,000$58,000 must be made. A

ssume that tuition does not increase over time and that your daughter remains in school for four years. How much money do you need today in your savings account, earning 5\%5% per annum, in order to make the tuition payments over the next four years, provided that you have to pay 35\%35% per annum in taxes on any earnings (e.G., interest on the savings)?
Business
1 answer:
Ierofanga [76]3 years ago
3 0

Answer: I'll need $2,14,309.02 in my savings account in order to make tuition payments over the next four years.

We follow these steps in order to arrive at the answer:

In this question, we need to take into account that we need to pay 35% as taxes on interest earned.

So even though the interest rate on the deposit is 5%, only 1 - 35% = 65% will be available for use.

Hence, effectively the deposit will only earn 0.05*0.65 = 0.0325\\ or 3.25% interest after taxes.

We'll compute the the Present Value of the annuity of 58,000 for four years at 3.25% interest in order to determine the amount that is needed today.

The Present Value of an Annuity formula is

\mathbf{PV_{Annuity}= PMT\left ( \frac{1 -(1+r)^{-n}}{r} \right )}

Substituting the values in the equation above we get,

PV_{Annuity}= 58,000\left (\frac{1 -(1.0325)^{-4}}{0.0325} \right )

PV_{Annuity}= 58,000\left (\frac{ 0.12008695 }{0.0325} \right )

\mathbf{PV_{Annuity}= 58,000 * 3.69 = 2,14,309.02}

You might be interested in
The _________________ is a resource that provides information on a wide variety of occupations, which also includes information
levacccp [35]
The lovely world of Internet. C:
4 0
3 years ago
Read 2 more answers
Which sentence indicates that Roger's company, Fine Jewelry, follows a subscription business model? Roger's company, Fine Jewelr
nlexa [21]

Answer:

Its "Customers get a new piece of jewelry every three months.

Explanation:

The first option, never tells what the customer gets in return.

 Sorry this answer is two weeks late. Happy Thanks Giving!

6 0
2 years ago
What is the type of international trade​
mr Goodwill [35]

profit really

Explanation:

There are three types of international trade: Export Trade, Import Trade and Entrepot Trade. ... It means importing goods from one country and exporting it to another country after adding some value to it. For instance, India imports gold from China makes jewelry from it and then exports it to other countries

5 0
3 years ago
If he wanted the cash award of each of the five prizes to be $45,000 and his estate could earn 7% per year, how much would he ne
Stels [109]

Answer:

The answer is $3,214,285.71

Explanation:

Price of each award is $45,000

And there are 5

Therefore, we have 5 x $45,000

=$225,000.

So, $225,000 is the future value.

Rate of return(r) in 7% and it is being assumed that it is forever.

So, so how much will be needed to fund his prizes(present value)?:

PV = FV/r

= $225,000/0.07

=$3,214,285.71

5 0
3 years ago
Regina is looking to start a knitting business and completes a target market profile to include in her business plan. Identify w
mojhsa [17]
In order to get the item and recategorizing it Regina needs to have in mind the Demographics it means facts about the economic status of the people, Geographics which means where customers live, Psychographics which means to determine the people's attitudes and beliefs and the Buying Patterns which means how they use their money. With that in mind you can see which item is not related<span>
</span>
6 0
3 years ago
Other questions:
  • 1. During pre-planning, the Activities Committee establishes the following project goal: "Optimus XT will promote and organize a
    13·2 answers
  • g During the past year, a company had cash flow to creditors, an operating cash flow, and net capital spending of $30,591, $69,5
    15·1 answer
  • A company collects an account receivable previously written off. Indicate how this transaction would affect:______.a. assets, st
    8·1 answer
  • Campbell Clothing produces men's ties. The following budgeted and actual amounts are for 2016:
    8·1 answer
  • If actual sales totaled $450,000 for the current year (30,000 units at $15 each) and planned sales were $540,000 (45,000 units a
    15·1 answer
  • At the beginning of the current period, Swifty Corporation had balances in Accounts Receivable of $195,100 and in Allowance for
    9·1 answer
  • Haroldsen Corporation is considering a capital budgeting project that would require an initial investment of $350,000. The inves
    14·2 answers
  • Look at the image pls help
    9·1 answer
  • Terry traveled to a neighboring state to investigate the purchase of two hardware stores. His expenses included travel, legal, a
    13·1 answer
  • Which solutions would be appropriate for everyone in both low financial wellness groups?
    5·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!