PLEASE PLEASE HELP!! I NEED TO TURN THIS IN TOMORROW!!
100 POINTS!!! Your journey off to college will be here before you know it! For this task, research a college of your choice and fill in the table below. You can find the tuition and fees breakdown on the school’s website. For the sake of this project, we are considering 1 semester to be 12 credit hours and time to college completion 5 years. If you are choosing a college outside the state in which you reside, be sure to use the non-resident tuition and fees. We are only considering tuition and fees, not room and board or any other costs/fees. Be sure to show your work for all calculations made.
College of Choice: MIZZOU (University of Missouri)
Tuition and Fees for 1 semester (12 hours total)
$14,122
Tuition and Fees per year (2 semesters)
$28,244
Tuition and Fees for 5 years (Round to the nearest dollar)
$31,272
Part 2:
Now, let’s imagine a trust was set up in your name when you were born to pay for your college in-full once you turn 18. The trust earns an interest rate of 5.5% compounded annually. Use the formula A = P (1 + i)n, where A is the value of the trust after n years, P is the initial investment, i is the interest rate represented as a decimal, and n is the number of years, to determine how much money should have been invested into the trust to cover your tuition and fees cost for 5 years. Be sure to show your work for all calculations made. (Round final answer to the nearest cent, but otherwise don’t round any intermediate values.)
Part 3:
Now, let’s say the trust was set up with an initial investment of $15,000 at a 12% annual interest rate. How many years would it take for the investment to accumulate enough money to cover 5 years of tuition and fees for your college education? Use the compound interest formula A = P (1 + i)n. Be sure to show your work for all calculations made.
Part 4:
Lastly, let’s consider the alternative method of paying for college: paying with loans. You take out a loan in the amount of your tuition and fees cost for 5 years rounded up to the nearest thousand dollars (for example if the total cost is $55,787 the loan would be for $56,000). The loan has a monthly interest rate of 0.25% and a monthly payment of $250. How long will it take you to pay off the loan? Use the formula to determine the number of months it will take you to pay off the loan. Let N represent the number of monthly payments that will need to be made, i represent the interest rate in decimal form, A represent the amount owed (total amount of the loan), and P represent the amount of your monthly payment. Be sure to show your work for all calculations made.
Part 5
Consider the 3 options used above for paying for your college tuition. Which method of payment would you consider to be the most reasonable choice? Why or why not? Explain your reasoning in at least 3 sentences.