Business and engineering seniors are comparing methods of financing their college education during their senior year. The business student has $30,000 in student loans that comes due at graduation. Interest is an effective 4% per year. The engineering senior owes $50,000: 50% from his parents with no interest due, and 50% from a credit union loan. This latter amount is also due at graduation with an effective rate of 7% per year. (a) What is the D-E mix for each student? (b) If their grandparents pay the loans in full at graduation, what are the amounts on the checks they write for each graduate? (c) When grandparents pay the full amount at graduation, what percent of the principal does the interest represent?

Patricia Graham is planning on going to the university. To finance her education, her bank has agreed to lend her $125,000 on the first day of each year for the next three years beginning January 1, 2011. The annual interest rate of 10% is compounded yearly. Patricia plans to graduate on December 31, 2013. What will be the amount owing to the bank on that date?

Megan Berry, a freshman horticulture major at the University of Minnesota, has some financial questions for the next three years of school and beyond. Round your answers for the following questions to the nearest dollar. If Megan's tuition, fees, and expenditures for books this year total $19,000, what will they be during her senior year (three years from now), assuming costs rise 3 percent annually? (Hint: Use Appendix A-1 or the Garman/Forgue companion website.) Round Future Value of a Single Amount in intermediate calculations to four decimal places. $   Megan is applying for a scholarship currently valued at $1,000 at the end of first year. If she is awarded it at the end of next year, how much is the scholarship worth in today's dollars, assuming inflation of 2 percent? (Hint: Use Appendix A-2 or the Garman/Forgue companion website.) Round Present Value of a Single Amount in intermediate calculations to four decimal places. $   Megan is already looking ahead to graduation…

You have $1,900 that you want to invest in your classmate’s start-up business. You believe the business idea to be great and expect to get $4,550 back at the end of three years. If all goes according to plan, what will be the annual return on your investment? (If you solve this problem with algebra round intermediate calculations to 4 decimal places, in all cases round your final answer to 2 decimal places, e.g. 8.72%.) The expected annual rate of return_____%