A young couple wants to plan for their child's college education when the child was...
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A young couple wants to plan for their child's college education when the child was born this year. They want their child to attend a college that has a tuition of $35000 per year. Tuition costs are expected to increase by 5 percent each year. Their child will begin college in 18 years and will graduate after four years in the college. College tuition must be paid at the beginning of each school year. Market annual interest rate is 8%. 1) If their goal is to have all of the money in the investment account by the time the child enters college, how much money they need to have in the account by that time? 2) What is the present value of the money you calculated in question 1)? 3) The couple will now start depositing a fixed amount of money to the child's education fund at the end of each year. How much money they need to save every year for the next 18 years to achieve the goal mentioned in 1 )
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