A professor has two daughters that he hopes will one day go tocollege. Currently, in-state students at the local University payabout $22,478.00 per year (all expenses included). Tuition willincrease by 3.00% per year going forward. The professor's oldestdaughter, Sam, will start college in 16 years, while his youngestdaughter, Ellie, will begin in 18 years. The professor is savingfor their college by putting money in a mutual fund that pays about7.00% per year. Tuition payments are at the beginning of the yearand college will take 4 years for each girl. (Sam's first tuitionpayment will be in exactly 16 years)
The professor has no illusion that the state lottery fundedscholarship will still be around for his girls, so how much does heneed to deposit each year in this mutual fund to successfully puteach daughter through college. (ASSUME that the money staysinvested during college and the professor will make his lastdeposit in the account when Sam, the OLDEST daughter, startscollege.)
