Time remaining:
education fund calculation

Business & Finance
Tutor: None Selected Time limit: 1 Day

Inflation rate: 3%

Investment return: 7%

Real return: (1+ 0.07)/ (1 + 0.03) - 1 = 3.88%p.a. = 0.32% per month

4years later will enter university, education fee is $50000per year, total 2years

calculate payment per month if he want to invest.

Apr 6th, 2015

Total at end $100,000
i 3.88%
 
Period Monthly investment PV 
1 1922.988609 1929.206 =1922.98/(1+3.88%/12)^1
2 1922.988609 1935.444 =1922.98/(1+3.88%/12)^2
3 1922.988609 1941.702  
4 1922.988609 1947.98  
5 1922.988609 1954.279  
6 1922.988609 1960.597  
7 1922.988609 1966.937  
8 1922.988609 1973.296  
9 1922.988609 1979.677  
10 1922.988609 1986.078  
11 1922.988609 1992.499  
12 1922.988609 1998.942  
13 1922.988609 2005.405  
14 1922.988609 2011.889  
15 1922.988609 2018.394  
16 1922.988609 2024.92  
17 1922.988609 2031.468  
18 1922.988609 2038.036  
19 1922.988609 2044.626  
20 1922.988609 2051.237  
21 1922.988609 2057.869  
22 1922.988609 2064.523  
23 1922.988609 2071.198  
24 1922.988609 2077.895  
25 1922.988609 2084.614  
26 1922.988609 2091.354  
27 1922.988609 2098.116  
28 1922.988609 2104.9  
29 1922.988609 2111.706  
30 1922.988609 2118.533  
31 1922.988609 2125.383  
32 1922.988609 2132.255  
33 1922.988609 2139.15  
34 1922.988609 2146.066  
35 1922.988609 2153.005  
36 1922.988609 2159.967  
37 1922.988609 2166.951  
38 1922.988609 2173.957  
39 1922.988609 2180.986  
40 1922.988609 2188.038  
41 1922.988609 2195.113  
42 1922.988609 2202.21  
43 1922.988609 2209.331  
44 1922.988609 2216.474  
45 1922.988609 2223.641  
46 1922.988609 2230.831  
47 1922.988609 2238.044  
48 1922.988609 2245.28  
if total is 50000 at the end then monthly payment is 1922.988/2 = $961.5

Apr 6th, 2015

thanks

May 1st, 2015

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