Economics Homework Help. Time value of Money Question
The question is : You have dreams of taking a sabbatical from work in 12 years and travelling the world.You are a thrifty traveler, and in part you will take part time jobs while travelling and thus you figure you will only need $12,000 to support your first year of travel. (Note: this $12,000 will be needed in exactly 12 years from today.)Each year your need for funds to support the next year of travel will increase 3% in order to keep up with inflation.You plan on travelling for 6 years, at which time you will go back and resume your career.You will thus need 6 years of payments to support your travel sabbatical. You currently have $10,000 of student debt which you also want to have paid off before you start your travels.To pay for your debt, and to pay for your travel sabbatical, you plan on starting a savings account with the first annual deposit being exactly one year from today.If you make 10 deposits that grow 4 percent per year, how much must your first deposit be in order to meet your goals.Assume that the semi-annual discount rate is 9.76%Be sure to show your work.
You should finish this question on Excel and Word document, show the process please. please notice the semi-annual discount rate not annuallyd.
