Your university is running a special offer on tuition. This year’s tuition cost is $16,000. Next year’s
tuition cost is scheduled to be $16,640. The university offers to discount next year’s tuition at a rate of 4% if you agree to pay both years’ tuition in full today. How much is the total tuition bill today if you take the offer?
20) You are paid to teach graduate-level classes for the university and want to determine how much money the university makes from your graduate-level classes. Based on historical data, you estimate that your graduate classes for the next six years will generate an average annual revenue of $99,850. If you discount these cash flows at an annual rate of 7.30%, what is the present value of the expected cash flows?
21) The school district needs to pass a bond levy for funding to remodel existing schools and to build new schools. Expenditures for the new and remodeled buildings will begin two years after passage of the bond. If the school district receives all funding immediately after the passage of the bond and can invest the funds at a rate of 2.75% per year, how large must the bond be for the district to have $48,000,000 at the start of construction?