In Order to Send Your First Child to Law School

question 119

Essay

In order to send your first child to Law School when the time comes,you want to accumulate $40,000 at the end of 18 years.Assuming that your savings account will pay 6% compounded annually,how much would you have to deposit if:
A)You want to deposit an equal amount at the end of each year?
B)You want to deposit one large lump sum today?

• A)You want to deposit an equal amount at the end of each year?
• B)You want to deposit one large lump sum today?

Understand the relationship between bond prices and market interest rates.

Calculate the number of bonds needed to be issued to raise a certain amount of money.

Understand the concepts of coupon rate, duration, and their impact on bond investment decisions.

Determine the inflation rate given nominal and real rates of return.

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Definitions:

Firm Offer

A legally binding proposal in contract law, ensuring the offer remains open for a specified time without the need for consideration.

Irrevocability

The quality of being irreversible or unchangeable, often used in legal contexts to describe contracts or decisions that cannot be revoked or undone.

Unilateral Contract

A contract in which one party makes a promise in exchange for the other party's performance, becoming binding once performance is completed.

Bilateral Promise

An agreement in which two parties make commitments to perform certain actions or obligations to one another.