Problem 9-47 Special consideration of annuities and time periods [LO9-4] Your parents have accumulated a $130,000 nest e

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Problem 9-47 Special consideration of annuities and time periods
[LO9-4]
Your parents have accumulated a $130,000 nest egg. They have
been planning to use this money to pay college costs to be incurred
by you and your sister, Courtney. However, Courtney has decided to
forgo college and start a nail salon. Your parents are giving
Courtney $16,000 to help her get started, and they have decided to
take year-end vacations costing $8,000 per year for the next four
years. Use 8 percent as the appropriate interest rate throughout
this problem. Use Appendix A and Appendix D for
an approximate answer, but calculate your final answer using the
formula and financial calculator methods.
a. How much money will your parents have at
the end of four years to help you with graduate school, which you
will start then? (Round your final answer to 2 decimal
places.)
b. You plan to work on a master’s and
perhaps a PhD. If graduate school costs $21,460 per year,
approximately how long will you be able to stay in school based on
these funds? (Round your final answer to 2 decimal
places.)