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S3 - Homework 3 Part(i No Growth Without MBA Yearly Income...

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Homework 3, Pa Without MBA Yearly Income $144,000.00 Percentage Saved 15% $21,600.00 Years in Working Life 34.00 Average yearly Return on Savings 5% 16.19 349,766.73 1,837,446.32 Homework 3, Part (ii): G Without MBA Yearly Income $144,000.00 Growth Rate for Income 4.50% Percentage Saved 15% $21,600.00 $20,669.86 Years in Working Life 34.00 Average yearly Return on Savings 5% 0.4785% 31.31 647,164.70 3,399,781.37 Yearly Savings, S AF (5%, 34) PV 0 (Savings) = S*AF (5%, 34) PV 34 (Savings) = [ PV 0 (Savings) ]*(1.05 34 ) Yearly Savings at t=1, S 1 Artifical Construct for Computation, S 0 = S 1 / (1+g) Artifical Construct for Computation, q = (r-g) / (1+g) AF (0.4785%, 34) PV 0 (Savings) = S 0 *AF (.4785%, 34) PV 34 (Savings) = [ PV 0 (Savings) ]*(1.05 34 )
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art (i): No Growth With MBA Yearly Income $180,000.00 Percentage Saved 15% $27,000.00 Years in Working Life 32.00 Average yearly Return on Savings 5% 15.80 426,672.27 2,033,068.39 Cash Out Flows With MBA Loan at t=0 $(63,000.00) Loan at t=1 $(63,000.00) (646,161.80) 1,386,906.59 Growth at Different Rates With MBA Yearly Income $180,000.00 Growth Rate for Income 6.75% Percentage Saved 15% $27,000.00 $25,292.74 Years in Working Life 32.00 Average yearly Return on Savings 5% -1.6393% 42.52 1,075,569.57 5,125,026.06 Cash Out Flows With MBA Loan at t=0 $(63,000.00) Loan at t=1 $(63,000.00) (646,161.80) 4,478,864.26 Yearly Savings, S AF (5%, 32) PV 2 (Savings) = S*AF (5%, 32) PV 34 (Savings) = [ PV 2 (Savings) ]*(1.05 32 ) PV 34 (Cash Out Flows) PV 34
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