134b.hw1.f11

134b.hw1.f11 - thereafter. a. Estimate the present value of...

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134b/F11 Homework 1: due 10/4/11 Q1. Q2. Q3. Q4. A father wishes to make equal annual payments to a bank account earning a 5% interest rate to provide for his daughter’s education. He estimates the educational expenses of his daughter to be as follows: Starting in five years, $5,000 yearly for four years, and $4,000 yearly for two years
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Unformatted text preview: thereafter. a. Estimate the present value of the educational costs and the amount of each annual payment (assume 11 payments, starting today). b. The father decides to increase his annual contribution by 3% every year. Estimate the amount of the first annual payment if his total payments will just cover educational expenses....
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