Question: I need help with c.2, everything else is answered. Financial planning case 5-2 Victor and Maria Hernandez Need to Save Money Fast The Hernandez family
I need help with c.2, everything else is answered.
Financial planning case 5-2 Victor and Maria Hernandez Need to Save Money Fast The Hernandez family is experiencing some financial pressures, even though the couple has a combined income of $90,000. Also, their eldest son, Joseph, will start college in only three years. Maria is contemplating going to work full time to add about $32,500 to the family's annual income.
b. How much should they save annually for the next three years if they want to build up Joseph's college fund to $28,000, assuming a 6 percent rate of return and ignoring taxes on the interest? Round your answer to nearest dollar. (Hint: Use Appendix A-3 or visit the Garman/Forgue companion website.) Round Future Value of a series of Equal Amounts in intermediate calculations to four decimal places.
$ 8795.0747
c. Given their 25 percent marginal tax rate, what is the Hernandezes' after-tax return on their savings? Round your answer to two decimal places.
4.5%
-> c.2 Given their after-tax return, how much would they need to save each year? Round your answer to nearest dollar. Round Future Value of a series of Equal Amounts in intermediate calculations to four decimal places.
$??
Step by Step Solution
There are 3 Steps involved in it
Get step-by-step solutions from verified subject matter experts
