Johnny and June would like to begin saving for their children's college education. They have four kids, ages 1, 5, 11, and 14. Each child will begin college at 18 and attend a private university for four years. Tuition is currently $22,000 per year and is increasing at 4% per year. They can earn an after-tax rate of return of 9%. How much must they save at the end of each year if they would like to make the last payment at the beginningof their youngest child's last year of college? a. $16,479. b. $19,271. c. $22,868. d. $24,434.
Johnny and June would like to begin saving for their children's college education. They have four kids, ages 1, 5, 11, and 14. Each child will begin college at 18 and attend a private university for four years. Tuition is currently $22,000 per year and is increasing at 4% per year. They can earn an after-tax rate of return of 9%. How much must they save at the end of each year if they would like to make the last payment at the beginningof their youngest child's last year of college? a. $16,479. b. $19,271. c. $22,868. d. $24,434.
Chapter5: The Time Value Of Money
Section: Chapter Questions
Problem 33P
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Johnny and June would like to begin saving for their children's college education. They have four kids, ages 1, 5, 11, and 14. Each child will begin college at 18 and attend a private university for four years. Tuition is currently $22,000 per year and is increasing at 4% per year. They can earn an after-tax
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