Mark is trying to decide if he should attend college or not. Part of his decision will be based on the return on investment of college. He estimates costs to attend Texas Tech for 4 years including room and board are $20,000 per year. He also assumes tuition costs will rise by 3.5% per year. How much is a 4-year degree going to cost Mark? $92,183.27 $84,298.86 $7,231,158.87 $1,314,002.83
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Mark is trying to decide if he should attend college or not. Part of his decision will be based on the
$92,183.27
$84,298.86
$7,231,158.87
$1,314,002.83
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- John is trying to decide if he should attend college or not. Part of his decision will be based on the return on investment of college. He estimates that the cost to attend Texas Tech, including room and board, is $24,044 per year. He also assumes costs will rise by 6% per year. How much is a 4-year degree going to cost, John? N 4 I/Y PV 0 PMT FV1. Josh is not sure if he should attend college or not. Part of his decision will be based on the return on investment of college. He estimates that the per year cost to attend Texas Tech including room and board is $27,750. He also assumes the cost will rise by 5.5% per year. How much is a 4 year degree going to cost Josh? A. Josh recognizes that not only will he have the costs of attending school, but he will also be giving up a salary while he attends school. He figures the average salary for those with only a high school diploma is $30,000. He assumes he would receive a 2.4% cost of living raise each year. Determine how much money he will forgo while attending school. B. If Josh adds the cost of college with the salary he will forgo by attending college, he finds it will cost: in total. (Keep in mind that this does not include any interest on loans needed to pay for school.) C. To help him determine if it really is worth it to get a college education, Josh wants to see what the…Your client has asked you what would be needed to fund your 2 children’s future college costs. Assume each child will begin college at age 18 and graduate in four years. Jamie is currently 14 years old and Johnny is currently 9 years old. Assume current costs are $24,000 per year and are expected to increase by 5% per year and investments earn 7%. Assuming no existing assets are dedicated to college, what is the annual savings required to fund the children’s education? Please include your calculator keystroke input for each step of this calculation.
- If the price of attending Big Benefits University is $8,000 a year for tuition, fees, books, and and $25,000 in foregone earnings, what is the marginal cost of attending, if it takes you 5 years to graduate, and you assume a 3% annual inflation rate? If the average college graduate makes $38,000 more every year than the average high school graduate, what is the cumulative marginal benefit of a college education if the average college graduate works for 40 years, assuming a 3% inflation rate? c.In this scenario does it make sense to go to college, explain your answer.Michael and Ava want to know how much it will cost to put their daughter Lily through college. She will begin college in 13 years. Assume college costs $12,000 per year today. Lily will attend college for 4 years. College costs increase 4.0% each year. How much money do Michael and Ava need to have on hand on the day Lily BEGINS college, in order to fund her entire college degree? (Assume the money will earn 6% annual interest while it is in her college savings account). Lily will spend the entire amount available during her college years. Each year of college she will withdraw more than the prior year (the amount will increase by the college cost inflation rate). (amortize the balance in her account to zero at the end of the 4 college years...base calculations on a growing annuity withdrawal schedule). (amortize the balance in her account to zero at the end of the 4 college years). O $73,292.32 O $69,235.87 O $48,000.00 O $79,923.53You calculate that you will need $75,000 in ten years to be able to pay for your daughter's college education. If you invest $20,000 today, what rate of return will you need to achieve this goal? Select one: A. Between 12% and 13% B. Between 13% and 14% C. Between 14% and 15% D. Between 15% and 16%
- 1. Jackie has just finished high school. She will live for two more periods, and she needs to choose a career path. She can either take a job right now as an Uber driver $28,000 in each of the two periods. Or she can get more education in period one to become an economist. Tuition in the first period would be $25,000 and she would earn $85,000 in the second period with her economics degree. a) Suppose the discount rate is 5% (r=.05). If Jackie wants to maximize the present value of her lifetime income, what should she do? Explain and show your calculations. b) Suppose the discount rate is 10% (r= .10). What should Jackie do? Explain and show your calculations c) Suppose the discount rate is 5% but suppose tuition costs are $30,000. What should Jackie do? Explain and show your calculations.Perry is a freshman. He estimates that the cost of tuition, books, room and board, transportation, and other incidentals will be $21,000 this year. He expects these costs to rise about $1500 each year while he is in college. If it will take him 5 years to earn his BS, what is the present cost of his degree at an interest rate of 4%? If he earns an extra $15,000 annually for 40 years, what is the present worth of his degree?Suppose John is going to decide whether to go to college or find a job after high school graduation, which option would you recommend? Consider based on the potential yearly tuition at $20,000 for four years, the expected salary for college graduate would be $60,000 every year, the expected salary for high school graduate would be $25,000 every year. Assume an interest rate of about 5%.
- imagine that you are to evaluate the economics of purchasing a condominium to live in during college rather than renting an apartment. if you buy the condo , during each of the next 4 years you will have to pay property taxes and maintanance expenditure of about $6,000 pe year, but you will avoid paying rent of $10,000 per year. when you graduate 4 years from now, you expect to sell the condo for $125,000 after taxes. if you buy the condo, you will use money you have saved that is currently invested and earning a 4% annual after tax rate of return. assume for simplicity that all cash flows (rent,maintainance, etc) would occur at the end of each year . a. draw a time line showing the cash flows,their timing, and the required return applicable to valuing the condo. b. what is the maximum price you would be willing to pay to acquire the condo ? explain .The Jeffersons have asked you what would be needed to fund the children’s future college costs. Assume each child will begin college at age 18 and graduate in four years. Assume current costs are $24,000 per year and are expected to increase by 5% per year and investments earn 7%. A. Assuming no existing assets are dedicated to college, what is the annual savings amount required to fund the children’s education? The Jeffersons’ goal is to have an amount at the beginning of the freshman year for each child that is sufficient to fund a serial payment covering the $24,000 of current costs of college adjusted for inflation for each of the four years of college. Please include your calculator keystroke inputs [PV, I/YR, N, FV, and PMT (if needed)] for each step of this calculation. Also include whether any PMTs are in the end mode or the begin mode. B. What would you say to the Jeffersons about their education funding situation? Write a script of a single paragraph as if you…Risk is planning to attend a two-year university. The list below shows the estimated costs for one year. His family devised a periodic savings plan that will have a total value of $29,000 by the time Rick will begin college. Rick also earned a scholarship that will pay for the first year. With the scholarship and his family's contribution, for how many years of college will be paid: Round to the nearest tenth. Two-Year University Estimated Costs Tuition and Fees. $5,650.00 Room and Board. $2,970.00 Books and Supplies $1,400.00 Personal Expenses. $2,100.00 a about 2.1 years b about 2.4 years c about 3.2 years d about 3.4 years