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3. Presently college education is increasing at the rate of 7% per year. If currently college cost is running at $21,000 a year, what will the Marcottes need to have saved up for Paloma in 7 years and for Joel in 15 years. Assume that the Marcottes are in the 25% tax bracket, and 6.5% for the State taxes. Furthermore you can assume that the Marcottes can earn 1% on their investments. You can use a financial calculator or the TVM formulas to find answers to the following: Hints- in responding remember to state your calculator keystoke or show your formula components for full credit assume all rates shown except the inflation rate, are compounded monthly. o For instance, 84 months for Paloma and 180 months for Joel for time periods. Check to make sure your interest rate is equivalent if you're using a financial calculator!)

a. How much will they have saved given their current $10,000, and assuming they presently can only save $100 per month for educational funding? i. By the time Paloma leaves for college? ii. By the time Joel leaves for college, assuming they do not use savings for Paloma? iii. How much would college cost be for Paloma's first year? iv. How much would college cost be for Joel's first year? v. What is Paloma's college cost shortfall? (iii. -i) vi. What is Joel's college cost shortfall? (iv.-ii.) vii. What are some saving programs and tools that the Marcottes might consider for these goals?

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3. Presently college education is increasing at the rate of 7% per year. If currently college cost is running at $21,000 a year, what will the Marcottes need to have saved up for Paloma in 7 years and for Joel in 15 years. Assume that the Marcottes are in the 25% tax bracket, and 6.5% for the State taxes. Furthermore you can assume that the Marcottes can eam 1% on their investments. You can use a financial calculator or the TVM formulas to find answers to the following: Hints in responaing: - remember to state your caiculator kegstoke or show your formula components for full credit - assume all rates shown except the byflarion rate, are compounded monthy: 681 - For tnstance, 84 monte for Paloma and 180 montit for Joel for time periads. - Check to make sune your beterest nase te equivalent if jou're using a fmancial caiculator!) a. How much will they have saved given their current $10,000, and assuming they presently can only save $100 per month for educational funding? i. By the time Paloma leaves for college? ii. By the time Joel leaves for college, assuming they do not use saving for Paloma? iii. How much would college cost be for Paloma's first year? iv. How much would college cost be for Joel's first year? v. What is Paloma's college cost shortfall? (iii. -i) vi. What is Joel's college cost shortall? (iv,-ii) vii. What are some saving progams and tools that the Marcottes might consider for these goals

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