Mary has just completed her undergraduate degree from Iowa State University and is already planning...
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Mary has just completed her undergraduate degree from Iowa State University and is already planning on entering an MBA program 4 years from today. The tuition will be $50,000 per year for 2 years, paid at the beginning of each year. In addition, Mary would like to retire 15 years from today and receive a pension of $60,000 every year for 20 years, with the first pension payment paid out 15 years from today. Mary can borrow and lend as much as she likes at a rate of 7%, compounded annually. In order to fund her expenditures, Mary will save money at the end of years 0-3 and at the end of years 6-14.
Calculate the constant annual dollar amount that Mary must save at the end of each of these years to cover all of her expenditures (tuition and retirement). (It might be helpful to use Goal Seek.)
A F H Tuition of MBA program Annual desired pension payout Annual savings Interest rate B D E Mary's Financial Planning 50,000.00 60,000.00 $X
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