The Future Tuition and the Annual Deposit Amount at Brown University
This is your 1st assignment. This assignment is directly related to the time value of money you learned in chapters 4 & 5. Answer the following question:
Let’s assume that you’re preparing for your (future) child (or grandchild)’s college education. 20 years later from now, your (future) child (or grandchild) will go to college.
The following is the list of universities assigned to each of you.
|
Brown University |
You’re considering the above college for your (future) child (or grandchild). Estimate the future cost of college for your (future) child (or grandchild) and calculate needed annual savings for these colleges. Please specify your assumptions for the computation of future costs and needed annual savings. To earn the full credit, you need to show the process to get the answer in your report.
1. Please visit the website of each university, find tuition and related information, and summarize this information. Use out-of-state tuition information if the university assigned to you is a state university. Make sure that you include accurate information and citation source in your report (20 points).
2. Calculate the future tuition amount you need for your (future) child (or grandchild) in 20 years. Please make sure that you show how to use a financial calculator or mathematical formula step by step in your report. Using the tuition and related information in Question #1, you need to compound it at a reasonable "inflation" rate for education-related expenses for x number of years. I hope most of you are aware that educational inflation has been much higher than overall inflation in the economy, (You can find ‘tuition inflation’ statistics from the internet. Use google.com and search for tuition inflation or education inflation) (40 points).
3. Calculate the annual deposit amount needed to have projected future tuition in 20 years. After you calculate the projected cost in Question #2, your next job is to find the annual deposit needed to accomplish the goal - meeting the educational expenses. You must assume the investment rate of return (You can use ‘savings account rate as your investment rate of return, for example) (40 points).
The Future Tuition and the Annual Deposit Amount at Brown University
Student Name
Institution
Professor Name
Course
Date
The Future Tuition and the Annual Deposit Amount at Brown University
The cost of learning for a student includes the school's billed charges and the scholar's expenses. Therefore, parents must be ready to bear the total expenses, which keep changing depending on inflation rates and students' enrollment statuses. Brown University's fee structure for the 2023 to 2024 academic year represents billed charges and the student's expenses separately. Brown University (2023) claims that the figures on its fee structure "represent the estimated costs for an incoming first-year full-time student for the academic year, including the fall and spring semesters" (para. 1). Parents should know the expenses related to their preferred college to help them plan appropriately.
Brown University’s 2023 to 2024 Academic Year’s Tuition and Related Information
Undergraduate Student Required Tuition & Fees
Charges
Annual Amount ($)
Fall 2023 Amount ($)
Spring 2024 Amount ($)
Tuition (full time)
65,656
32,828
32,828
Student activity fee
300
150
150
Student resource fee
1,004
502
502
Student recreation fee
80
40
40
Health service fee
1,090
545
545
Academic record fee
100
50
50
Health insurance fee
4,636
1,761
2,875
Total Tuition & Fees
72,866
35,876
36,990
Table 1: Undergraduate Student Required Tuition & Fees for Academic Year 2023/2024
Source: Brown University (2023)- https://www.brown.edu/about/administration/bursar/tuition-and-fees-0/undergraduate-tuition-fees
A Student’s Housing and Meal Plan Rates
Charges
Annual Amount ($)
Fall 2023 Amount ($)
Spring 2024 Amount ($)
Regular/Suites and Dormitory Apartments
9,650
4,825
4,825
20 Weekly Meal Plan
6,948
3,474
3,474
Total Housing and Meal Plan Rates
16,598
8,299
8...
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