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Author Question: John and Daphne are saving for their daughter Ellens university education. Ellen is now 10 years old ... (Read 58 times)

dongbo

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on: Aug 7, 2023

Question 1

If a bank pays a5.5% nominal rate, with monthly compounding on deposits, what effective annual rate (EFF%) does the bank pay?

◦

5.35%


◦

5.64%


◦

6.13%


◦

6.59%



Question 2

John and Daphne are saving for their daughter Ellen’s university education. Ellen is now 10 years old and will be entering university 8 years from now (t = 8). University tuition and expenses at City U are currently $15,000a year, but they are expected to increase at a rate of4% a year. John and Daphne expect Ellen to graduate in 4 years. (If Ellen wants to go to graduate school, she will be on her own.) Tuition and other costs will be due at the beginning of each school year (at t = 8, 9, 10, and 11). So far, John and Daphne have accumulated $14,000 in the university savings account. Their long-run financial plan is to add an additional $6,000 at the beginning of each of the next 4 years (at t = 0, 1, 2, and 3). Then they plan to make four equal annual contributions at the end of each of the following five years (t = 4, 5, 6, 7, and 8). They expect their investment account to earn8.5%. How large must the annual payments be at t = 4, 5, 6, 7, and 8 to meet Ellen’s anticipated university costs?

◦

$1,398.37


◦

$1,472.01


◦

$1,569.82


◦

$1,627.16

Financial Management: Theory and Practice ¦ Brigham, Ehrhardt, Gessaroli, Nason ¦ 4th Edition
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Marked as best answer by dongbo on Aug 7, 2023

swagmaster69

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Reply #1 on: Aug 7, 2023
Lorsum iprem. Lorsus sur ipci. Lorsem sur iprem. Lorsum sur ipdi, lorsem sur ipci. Lorsum sur iprium, valum sur ipci et, vala sur ipci. Lorsem sur ipci, lorsa sur iprem. Valus sur ipdi. Lorsus sur iprium nunc, valem sur iprium. Valem sur ipdi. Lorsa sur iprium. Lorsum sur iprium. Valem sur ipdi. Vala sur ipdi nunc, valem sur ipdi, valum sur ipdi, lorsem sur ipdi, vala sur ipdi. Valem sur iprem nunc, lorsa sur iprium. Valum sur ipdi et, lorsus sur ipci. Valem sur iprem. Valem sur ipci. Lorsa sur iprium. Lorsem sur ipci, valus sur iprem. Lorsem sur iprem nunc, valus sur iprium.
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dongbo

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Reply 2 on: Aug 7, 2023
Great answer, keep it coming :)

mohan

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Reply 3 on: Yesterday
Excellent

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