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Assume 8% interest rate
You need to pay $12000 tuition fee at the end of each year in the next
6 years. What is the amount that you need to prepare today to pay all
the tuition fees in the next 6 years?
Assume that you have 60476 USD right now. After paying the tuition
fees in the next 6 years, what is the remaining amount at the end of
year 6.

Respuesta :

francocanacari

Thus, the tuition fee for 6 years would be $72,000, and after paying the tuition fees in the next 6 years, the remaining amount would be $35,491.81.

Given that you need to pay $ 12000 tuition fee at the end of each year in the next 6 years, to determine what is the amount that you need to prepare today to pay all the tuition fees in the next 6 years, assuming that you have 60476 USD right now and will be invested at 8% per year, and determine, after paying the tuition fees in the next 6 years, what is the remaining amount at the end of year 6, the following calculations must be made:

  • 12000 x 6 = 72000
  • X = 60476 x (1 + 0.08 / 1) ^ 6x1
  • X = 60476 x 1.08 ^ 6
  • X = 60476 x 1.5868
  • X = 95967.81
  • 95967.81 - 60476 = 35.491.81

Thus, the tuition fee for 6 years would be $ 72,000, and after paying the tuition fees in the next 6 years, the remaining amount would be $ 35,491.81.

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