Fill in all the red forms. Only the pv, fv, pmt formulas in excel can be used.
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Fill in all the red forms. Only the pv, fv, pmt formulas in excel can be used. No other formulas can be used, all red forms must be completed
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AB C PV of Total Tuition Annual Deposit Amount Q1 Henry Spencer is interested in saving money to put his son, Shawn, through college. Shawn is turning 9 years old today, and Henry wants to be able to deposit an equal amount into a savings account each birthday until Shawn turns 21. He wants the deposits to be just large enough to pay for all 4 years of Shawn's education, and he plans to make the first deposit in a year. You can assume that tuition payments will be made on Shawn's 18th through 21st birthdays. You can also assume that the current cost of tuition is $14,500 a year, and that the cost will increase by 2.5% per year. If Henry is able to earn 12% a year in his account, how much should he deposit in the acount each year? (20 points total) Rate of Return Tuition Cost Year 0 Tuition Inflation Rate $ D $ 14,500.00 12.0% 14,500 2.5% Year 0 1 2 3 4 5 6 7 8 9 10. 11 12 Shawn's Age 9 10 11 12 13 14 15 16 17 18 19 20 21 $ $ $ $ $ 555 $ $ S ss. $ H $ Tuition 14,500.00 $ 14,862.50 15,234.06 15,614.91 16,005.29 16,405.42 16,815.55 17,235.94 17,666.84 18,108.51 18,561.23 19,025.26 19,500.89 Deposit Account Balance AB C PV of Total Tuition Annual Deposit Amount Q1 Henry Spencer is interested in saving money to put his son, Shawn, through college. Shawn is turning 9 years old today, and Henry wants to be able to deposit an equal amount into a savings account each birthday until Shawn turns 21. He wants the deposits to be just large enough to pay for all 4 years of Shawn's education, and he plans to make the first deposit in a year. You can assume that tuition payments will be made on Shawn's 18th through 21st birthdays. You can also assume that the current cost of tuition is $14,500 a year, and that the cost will increase by 2.5% per year. If Henry is able to earn 12% a year in his account, how much should he deposit in the acount each year? (20 points total) Rate of Return Tuition Cost Year 0 Tuition Inflation Rate $ D $ 14,500.00 12.0% 14,500 2.5% Year 0 1 2 3 4 5 6 7 8 9 10. 11 12 Shawn's Age 9 10 11 12 13 14 15 16 17 18 19 20 21 $ $ $ $ $ 555 $ $ S ss. $ H $ Tuition 14,500.00 $ 14,862.50 15,234.06 15,614.91 16,005.29 16,405.42 16,815.55 17,235.94 17,666.84 18,108.51 18,561.23 19,025.26 19,500.89 Deposit Account Balance
Expert Answer:
Answer rating: 100% (QA)
Solution using Excel Functions PV FV PMT Missing Information We cant directly calculate the annual deposit amount using only PV FV and PMT functions i... View the full answer
Related Book For
Income Tax Fundamentals 2013
ISBN: 9781285586618
31st Edition
Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill
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