# Rachael’s tuition, fees, and , what will they

Oct 19th, 2014
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a. If Rachael’s tuition, fees, and expenditures for books this year total \$12,000, what will they be during her senior year (three years from now), assuming costs rise 4 percent annually? (Hint: Use Appendix A.1 or the Garman/Forgue companion website.)

b. Rachael is applying for a scholarship currently valued at \$5,000. If she is awarded it at the end of next year, how much is the scholarship worth in today’s dollars, assuming inflation of 3 percent? (Hint: Use Appendix A.2 or the Garman/Forgue companion website.)

c.  Rachael is already looking ahead to graduation and a job, and she wants to buy a new car not long after her graduation. If after graduation she begins an investment program of \$2,400 per year in an investment yielding 6 percent, what will be the value of the fund after three years? (Hint: Use Appendix A.3 or the Garman/Forgue companion website.)

d. Rachael’s Aunt Karroll told her that she would give Rachael \$1,000 at the end of each year for the next three years to help with her college expenses. Assuming an annual interest rate of 2 percent, what is the present value of that stream of payments? (Hint: Use Appendix A.4 or the Garman/Forgue companion website.)

(Top Tutor) Daniel C.
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Oct 19th, 2014
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