A financial planning service offers a college savings program. The plan calls fo

Question

A financial planning service offers a college savings program. The plan calls for you to make six annual payments of $14,300 each, with the first payment occurring today, your child’s 12th birthday. Beginning on your child’s 18th birthday, the plan will provide $32,000 per year for four years.

A financial planning service offers a college savings program. The plan calls for you to make six annual payments of $14,300 each, with the first payment occurring today, your child’s 12th birthday. Beginning on your child’s 18th birthday, the plan will provide $32,000 per year for four years.

Explanation / Answer

Return on investment = (gain from initial investment - cost of investment )/ cost of investment

=( 32000 * 4 - 14300 * 6)/ 14300 * 6

= 128000 - 85800 / 85800 = 0.4918 = 49.18 %

Related Questions

Navigate

• Browse (All)
• Browse A
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.