Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. consider the following information: currently, th

Consider the following information: Currently, the total cost to attend college is $63,383 per...

80.2K

Verified Solution

Question

Accounting

Consider the following information:

  • Currently, the total cost to attend college is $63,383 per year (before financial aid).
  • Assume that you are presently 20 years old, and that you plan to have a child when you are 30 years old (10 years from now, 2031). Assume that child will attend college when they are 18 years old (28 years from now, starting fall 2049).
  • Assume you expect to earn an annual return of 6% per year on any money you have invested (and this is the rate you would use in any time value calculations).
  • Assume that the rate of increase in college cost into the future is 5% per year (it was actually 6% for many years).

Required:

  1. Based on the rate of cost increase, what would be the cost of attendance for the first year of your childs college education?

  1. How much would you need to start saving every month, starting at the end of the current month, to accumulate enough to pay 4 years of costs at the amount you determined in (1)?

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students