Assume the total cost of a college education will be $250,000 when your child enters college in 17 years

Assume the total cost of a college education will be $250,000 when your child enters college in 17 years. You presently have $72,000 to invest.

What annual rate of interest must you earn on your investment to cover the cost of your child’s college education?

We can use either the FV or the PV formula. Both will give the same answer since they are the inverse of each other. We will use the FV formula, that is:

FV = PV(1 + r)^t
Solving for r, we get:

r = (FV / PV)^(1 / t) – 1
r = ($250,000 / $72,000)^1/17 – 1 = 0.0760, or 7.60%

The situation in which a firm is unable to meet its financial obligations is called

A. technical insolvency. 

B. liquidation. 

C. reorganization.

D. accounting insolvency

Insolvency mean that the assets of the company will not able to meet the liabilities obligation’s . So in the option provided accounting insolvency is best answer for it.