A wealthy businesswoman promises a kindergarten class that she will pay 4 years of college tuition...

 

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A wealthy businesswoman promises a kindergarten class that she will pay 4 years of college tuition of any child who graduates in 13 years. The annual tuition to be paid in 13 years is expected to be $35,000, and it will increase by 3% per year. The return on her investments is 9% per year. What is the value of her promise to each child today? A wealthy businesswoman promises a kindergarten class that she will pay 4 years of college tuition of any child who graduates in 13 years. The annual tuition to be paid in 13 years is expected to be $35,000, and it will increase by 3% per year. The return on her investments is 9% per year. What is the value of her promise to each child today?

Answer rating: 100% (QA)

To calculate the future value of the annual tuition payments in 13 years Well use the formula ... View the full answer