Time remaining:
education fund calculation

Business & Finance
Tutor: None Selected Time limit: 0 Hours

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 5th, 2015

Total at end$100,000
i3.88%
PeriodMonthly investmentPV 
11922.9886091929.206=1922.98/(1+3.88%/12)^1
21922.9886091935.444=1922.98/(1+3.88%/12)^2
31922.9886091941.702
41922.9886091947.98
51922.9886091954.279
61922.9886091960.597
71922.9886091966.937
81922.9886091973.296
91922.9886091979.677
101922.9886091986.078
111922.9886091992.499
121922.9886091998.942
131922.9886092005.405
141922.9886092011.889
151922.9886092018.394
161922.9886092024.92
171922.9886092031.468
181922.9886092038.036
191922.9886092044.626
201922.9886092051.237
211922.9886092057.869
221922.9886092064.523
231922.9886092071.198
241922.9886092077.895
251922.9886092084.614
261922.9886092091.354
271922.9886092098.116
281922.9886092104.9
291922.9886092111.706
301922.9886092118.533
311922.9886092125.383
321922.9886092132.255
331922.9886092139.15
341922.9886092146.066
351922.9886092153.005
361922.9886092159.967
371922.9886092166.951
381922.9886092173.957
391922.9886092180.986
401922.9886092188.038
411922.9886092195.113
421922.9886092202.21
431922.9886092209.331
441922.9886092216.474
451922.9886092223.641
461922.9886092230.831
471922.9886092238.044
481922.9886092245.28
if total is 50000 at the end then monthly payment is 1922.988/2 = $961.5

Apr 10th, 2015

Did you know? You can earn $20 for every friend you invite to Studypool!
Click here to
Refer a Friend
...
Apr 5th, 2015
...
Apr 5th, 2015
Dec 9th, 2016
check_circle
Mark as Final Answer
check_circle
Unmark as Final Answer
check_circle
Final Answer

Secure Information

Content will be erased after question is completed.

check_circle
Final Answer