Biology Forums - Study Force

The average annual costs to support a child born today are estimated as follows:

Years 1 to 6	$12,000
Years 7 to 12	$11,000
Years 13 to 17	$10,000
Years 18 to 19	$15,000

The costs in the early years include child care expenses or foregone earnings of the care-giving parent.

a) What is the aggregate total cost (ignoring the time value of money) of raising a child to age 19?
b) To the nearest dollar, what is the total economic value, at the date of birth of a child, of these future expenditures, allowing for a time value of money of 6% compounded monthly? Assume that the annual costs are paid in equal end-of-month amounts.
c) To the nearest dollar, what will be the economic value at age 19 of the past expenditures, allowing for a time value of money of 6% compounded monthly?

Content hidden