Your Son Is About to Start Kindergarten in a Private

question 58

Multiple Choice

Your son is about to start kindergarten in a private school.Currently,the tuition is $12,000 per year,payable at the start of the school year.You expect annual tuition increases to average 6% per year over the next 13 years.Assuming that you son remains in this private school through high school and that your current interest rate is 7%,then the present value of your son's private school education is closest to:

• A)$332,300
• B)$137,900
• C)$155,800
• D)$156,000

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Definitions:

Mental Impairment

A reduction in cognitive, emotional, or behavioral functioning, which may affect daily living and can be temporary or permanent.

Nondisjunction

Failure of the homologous chromosomes or sister chromatids to separate during either mitosis or meiosis; produces cells with abnormal chromosome numbers.

Homologous Chromosomes

Pair of chromosomes that have the same gene sequences, each derived from one parent.

Meiosis

A type of cell division that reduces the chromosome number by half, resulting in the production of gametes or spores in sexually reproducing organisms.