3232ex12-2 - 63987.85 19 30,000 (F/P,6%,14) 67827.12 20...

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3232ex12-2 Establishing a college fund during inflationary periods Investment fund will earn 8% compounded quarterly Goal: Have $30K/yr in today's dollars available for 4 years Child has just turned 5 yrs old Drawdown will occur on the 18th birthday and for 3 birthdays thereafter College rates are projected to grow at 6%/yr To establish the fund equal quarterly payments will be made over 12 years (investments start when child is 5yr-3mo) College Expenses Year 18 30,000 (F/P,6%,13)
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Unformatted text preview: 63987.85 19 30,000 (F/P,6%,14) 67827.12 20 30,000 (F/P,6%,15) 71896.75 21 30,000 (F/P,6%,16) 76210.55 (F/A,2%,48)= 79.35351927 Equivalence on the 17th Birthday A (F/A,2%,48)= 63987.85 (P/F,2%,4)+ 67827.12 (P/F,2%,8)+ 71896.75 (P/F,2%,12)+ 76210.55 (P/F,2%,16) 59114.88 + 57889.79 56690.09 + 55515.26 A 79.35351927 = 229210.02 A= 2888.47 Quarterly Payment College Expense - Today's Dollars Conversion to Actual College Expense Actual Expense...
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This note was uploaded on 11/19/2010 for the course ME 3232 taught by Professor Lyon during the Fall '10 term at University of New Brunswick.

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