# 24 + An elite law school will charge you $37,700.00 for your first year of...

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# 24 + An elite law school will charge you $37,700.00 for your first year of tuition. This is due at the beginning of the year. You anticipate tuition to increase by 4.00% each year going forward. You will spend three years in the law program. You are unsure what discount rate to use to value the opportunity. You have a conservative discount rate, 5.00%, and an aggressive rate of return, 7.00%. Using the conservative discount rate, what is the value of the tuition the day you start the law school? Submit Answer format: Currency: Round to: 2 decimal places. Show Hint # 24 + An elite law school will charge you $37,700.00 for your first year of tuition. This is due at the beginning of the year. You anticipate tuition to increase by 4.00% each year going forward. You will spend three years in the law program. You are unsure what discount rate to use to value the opportunity. You have a conservative discount rate, 5.00%, and an aggressive rate of return, 7.00%. Using the conservative discount rate, what is the value of the tuition the day you start the law school? Submit Answer format: Currency: Round to: 2 decimal places. Show Hint

Answer rating: 100% (QA)

We must use a cautious discount rate of 5 to convert future tuition payments to their ... View the full answer