yanina.yearwood Sent via BlackBerry by AT&T From: MULEKA KIKWEBATI Date: Wed 25

yanina.yearwood
Sent via BlackBerry by AT&T From: MULEKA KIKWEBATI
Date: Wed 25 Apr 2012 12:04:51 -0400
Subject: FIN534053VA009-1124-001: Chapter 4 Problem 5 Homework Homework Chapter
4 Problem 5 Do the following: 1. 1. Compute the tuition at10:21 PM
Do the following:1.
1. Compute the tuition at each yeara. Year 1 (t=8) = Current cost x
(1+inflation rate)8b. Year 2 (t=9) = Year 1 cost x (1+inflation rate) or
Current cost x (1+inflation rate)9c. Year 3 (t=10) = Year 2 cost x
(1+inflation rate) or current cost x (1+inflation rate)10d. Year 4
(t=11) = Year 3 cost x (1+inflation rate) or current cost x (1+inflation
rate)112. 2. Compute the PV of the cost at (t=8) discount rate
=9% or .09a. PV of tuition at t=8=Year 0. PV of any amount today equal
to that amountb. PV of tuition at t=9 t or Nper =1c. PV of
tuition at t=10 t or Nper=2d. PV of tuition at t =11 t or Nper =
33. 3. Add the PV of tuitions computed in step 24. 4.
Compute the FV of:a. 15000 when rate =.09 and time or Nper
=8b. 5000 when rate =.09 and time or Nper =7c. 5000 when rate
= .09 and time or Nper = 6d. 5000 when rate = .09 and time or Nper =
5e. 5000 when rate = .09 and time or Nper = 45. 5. Add
the FV as computed in step 46. 6. Find the difference between the costs
and computed in step 3 and the contributions as computed in step 57. 7.
Compute the PMT (Payment) for a 3-year ANNUITY DUE rate =.09 Nper=3 and FV
the difference computed in Step 6