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College education question


Draino76
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David and Helen Clark are planning to pay for their daughter's four-year college education starting fifteen years from now. The current annual cost of a college education is $18,000 and this is expected to rise at an annual rate of 3%. If interest rates are expected to be 4% for the foreseeable future, the amount that they must save each year, if they intend to make fourteen equal annual payments, beginning in one year's time, is closest to:

 

A$5,309.

 

B$5,602.

 

C$5,812.

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The correct answer is: C

 

 

 

College fee today

 

 

= $18,000

 

College fee in

 

 

15 years' time

 

 

= 18,000 x 1.0315= 28,043

 

 

 

16 years' time

 

 

= 18,000 x 1.0316= 28,885

 

 

 

17 years' time

 

 

= 18,000 x 1.0317= 29,751

 

 

 

18 years' time

 

 

= 18,000 x 1.0318= 30,644

 

At t = 14, the value of these four-year fees, discounted at an interest rate of 4% is equal to

 

28,043

 

 

+

 

 

28,885

 

 

+

 

 

29,751

 

 

+

 

 

30,644

 

 

= 106,313

 

1.04

 

 

1.042

 

 

1.043

 

 

1.044

 

The future value of annual savings at t = 14 must be equal to $106,313

 

This is the future value of a 14-year annuity, where the annual payment is the amount that must be saved each year

 

Use your calculator to obtain the value of the annual payment

 

FV = 106,313

 

Interest rate = 4%

 

No. of periods = 14

 

Payment = $5,812

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14 year course

 

I would say 4 years at Uni

 

Estimated annual salary at a job that actually is worth doing a degree for £50k

 

10 x £50k = 500k

 

Id say thats not a bad deal TBH

 

As apposed to

 

Annual estimated salary of someone that coukdnt really be arsed and went to Uni as its the thing to do but actually did end up getting a job anyway, possibly about £20k

 

10x 20k = 200k

 

You do the math, students do my head in

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14 year course

 

I would say 4 years at Uni

 

Estimated annual salary at a job that actually is worth doing a degree for £50k

 

10 x £50k = 500k

 

Id say thats not a bad deal TBH

 

As apposed to

 

Annual estimated salary of someone that coukdnt really be arsed and went to Uni as its the thing to do but actually did end up getting a job anyway, possibly about £20k

 

10x 20k = 200k

 

You do the math, students do my head in

 

Did a student abuse you as a child or something?! You seem have real anger issues about them.

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Because most of them are *****s and remain so until theyve been in the workplace for about 3 years and realised that the world doesn't owe them a living.

 

If it makes you feel any better, I don't think anyone owes me anything at all. And I know I'll have to work ridiculously hard to get where I want. And none of my friends think the world owes them anything either.

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If it makes you feel any better, I don't think anyone owes me anything at all. And I know I'll have to work ridiculously hard to get where I want. And none of my friends think the world owes them anything either.

 

You really are the greatest teenager alive.

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I did some work at Plymouth Uni last sunday...it involved their sports society day for the freshers....I have never seen a bigger collection of gimps in my life.

 

 

frisbee club ffs...what the fuk

 

Well, everyone has their things they want to do to have a good time I guess. I don't think we should judge.

Edited by Saintandy666
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Yes, the best programme on television has returned, my dear friend! I am watching and talking to you, coincidently my other favourite thing to do. Having a great night, cheers for asking.

 

Living the dream. I used to go to JFKs when i was your age and almost pull my ex school teachers!

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I doubt Turkish could get someone with the intelligence to go to university.

 

Don't be ridiculous there are plenty of media studies students gagging for it and psychology student you call pull by telling them anything. Marketing was always my sweet spot though, they always seem to froth at the gash for me.

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Did a student abuse you as a child or something?! You seem have real anger issues about them.

 

Not with all of them, some are a vital part of the community.

 

I was a student, although I didnt pay for it per se, I did take a substantial pay cut to come to the job I am now in, who in turn funded a degree.

 

My issue is not with those that use Uni as the sacrifice it is and make something of themselves, although the pros outweigh the risks, but those who use pathetic pointless degrees as a free ride, funded through the majority by the taxpayer.

 

And lets not go down the route that uni shouldnt be Elitist as it should, its the whole point of it, unfortunately the job market is too often flooded with useless degrees, far too many come out with a degree in soap box preaching and end up at tesco

 

What are you studying anyways Saintandy ? And what do you hope to be ?

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Not with all of them, some are a vital part of the community.

 

I was a student, although I didnt pay for it per se, I did take a substantial pay cut to come to the job I am now in, who in turn funded a degree.

 

My issue is not with those that use Uni as the sacrifice it is and make something of themselves, although the pros outweigh the risks, but those who use pathetic pointless degrees as a free ride, funded through the majority by the taxpayer.

 

And lets not go down the route that uni shouldnt be Elitist as it should, its the whole point of it, unfortunately the job market is too often flooded with useless degrees, far too many come out with a degree in soap box preaching and end up at tesco

 

What are you studying anyways Saintandy ? And what do you hope to be ?

 

I do agree with you that a lot of degrees are utterly pointless/useless, and now that it is 9k a year, it's not only sad for the taxpayer, it's sad for the individuals involved. I don't really have the heart to tell people who have told me they are going to do a phototography degree at Farnham that they are never going to pay off their fees, and almost certainly won't get a job in photography. But at the same time, I think it is good that as many people go to uni as possible in degrees that stretch people. We need a well educated country to compete in the high-tech market of tomorrow. But at the same time, just as a Doctor can't fix leaking pipes, a plumber can't fix an unhealthy body. So, I think we need less stupid targets in this country, and more emphasis on practical, as well as academic routes because both are worthy routes to worthy careers and not everyone is suited to university.

 

As for me I head off to Oxford on Sunday to study Human Sciences(http://www.ihs.ox.ac.uk/). Because it's a science course, I would be eligible for the accelerated medicine course. So the plan is I would try to get into that afterwards, but Medicine is extremely hard to get into and good grades aren't enough. That's what I hope to do anyways(unless this course inspires me to take a different route)... but either way an Oxford degree should stand me in good stead for something even if my plans do fail.

Edited by Saintandy666
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Well, cant really argue with any of that, and Oxford, not bad going at all either.

 

I agree with you on different options, I still see, for instance in school, for GCSEs to be a an option but also if a kid is not acedemic why not an apprenticeship starting in the ladt or two last years ? And just get them through science, english and maths ?

 

Uni isnt for everyone, which is why I see the increase in fees as a good thing, and lets be honest the repayments are hardly crippling nor are they forever, if you fo not earn enough you dont pay back.

 

I think we should have fewer degree courses with higher standards set in all of them, and push industry to employ and pay for places at Uni for those they see have potential, removing the burden from thr taxpayer and placing more emphesis on the pupil/employee to work hard and achieve more

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