Question

Your parents have accumulated a $170,000 nest egg. They have been planning to use this money to pay college costs to be incurred by you and your sister, Courtney. However, Courtney has decided to forgo college and start a nail salon. Your parents are giving Courtney $20,000 to help her get started, and they have decided to take year-end vacations costing $8,000 per year for the next four years. Use 8 percent as the appropriate interest rate throughout this problem. Use Appendix A and Appendix D for an approximate answer, but calculate your final answer using the formula and financial calculator methods. a. How much money will your parents have at the end of four years to help you with graduate school, which you will start then? (Round your final answer to 2 decimal places.) Funds for graduate school b. You plan to work on a master's and perhaps a PhD. If graduate school costs $23,540 per year, approximately how long will you be able to stay in school based on these funds? (Round your final answer to 2 decimal places.) Number of years Appendix A Fun Value of LIVE F P Period 252 435 1040 1040 TOG! 10 1020 1.082 1104 1126 1 159 1216 1275 1.262 1338 1.518 1685 1217 1041 051 1062 1072 1083 094 1407 150 140 172 1195 230 267 1.900 2144 2016 2.305 2.550 2.839 1.718 1.828 1967 1423 1 344 2357 2594 2.159 2.133 1426 3.4 L116 1127 1.138 1.149 1161 1173 124 1268 .294 1319 346 173 2 BUXOR 4.310 1513 155 1GOS 5311 5.895 6.544 196 1428 1601 1.796 2012 1665 1986 2.133 2.410 1 732 1980 2.261 2579 1801 20792.397 270 2.13 1948 2292 2693 2.026 2.407 2854 3.30 2527 3517 2191 2.191 2052 1207 1070 2666 3.386 4.292 5.427 3.243 4.322 5743 7.612 4 801 7040 10 286 4 974 710711 457 42029.457 1702 2.720 3.066 .937 3342 3.797 3172 1426 2.970 3.700 4.328 5,054 3.996 4.717 5.560 6115 5.604 6727 6843 8.623 10.35 10.063 13.263 17.49 21725 31 409 4690274.5311779 1062 13:55 220 406 30G 22 16412094 1348 1.811 2.427 148922083752 16452692 734 Appendix A concluded Free of $1 55001 Percent 15 1 7% 204 205 1.120 1.254 1.495 1.369 1602 1.643 1521 1.749 1 346 1.561 1811 2.100 1.277 1.300 1.482 1.689 3.925 2002 2.15 2353 2002 26582853 31004 3.252 3395 3.797 376 4775 2013 2.000 2036 2.700 2.211 25 3.001 3511 3379 4021 2.755 3.278 3.803 4411 5117 2052 2015 4.760 5960 7.451 9313 11 442 14 552 1503 4300 5160 5192 7430 3518 045 4552 4 3.106 3479 4807 5234 55245176 5696 6.777 G 4.33 4 5492 4.887 5535 6.261 5.474 5.254 7.138 6.130 7067 8137 6.856 7.966 9.276 7.690 3024 10:575 1.612 10.197 12.056 9.646 11.523 13.743 17.000 21.231 26.462 29.960 39 116 50950 93.051 132.78188 88 789.00 490 74 700 22 7076 8132 9358 10.751 1 3175 14232 16.367 32.919 5 6212 2 6785 0 7 9 .266 10.748 12.458 14.662 16.777 19.451 40874 5850 378.72 1670.7 9.007 10.539 2330 14426 16.379 19741 23106 50.658 1110 533.87 2.5662 10.147 11.574 1429 15.672 9.673 21214 27.333 62.669 163.37 7 50.38 1.927.4 13590 15.407 18.488 19 244 2216 22.091 26423 2725231941 32.429 38.338 77.388 95.396 1846 237 38 1051,7 1,4598 S 9,100 4 28.422 35 573 44409 SS SI G. 96.735 264.70 307.79 7,5232 7 0,055.0 374 51.186 65.542 86.504 112.06 146.19 190.05 20554 26200 35.119.0 497.929.0 8

Answer 1

formulas used :-

ave 152 153 154 155 Total funds available Amount given to Courtney Remaining amount Vacation requirements(yearly) Interest rate period in years) 170000 -20000 150000 -8000 8% | 156 157 158 159 160 amount accumulated after 4 years Amount required for further education $168,024.45 -23540 161 162 163 No. of years able to stay in school 11.00

amount accumulated after 4 years

=FV(C157,C158,C156,C155)

No. of years able to stay in school =NPER(C157,C161,C160)

I hope my efforts will be fruitful to you...?