A newborn child comes into your life, and you decide to start a college fund for...

 

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A newborn child comes into your life, and you decide to start a college fund for this child to draw on when she is 18 years old. You estimate that the annual cost of college (room, board, tuition, fees, and books) will be about $60,000 per year in 18 years. You also figure that annual costs will increase by 3% per year for each of the additional three years she spends getting her undergraduate degree. You also think the average interest rate you can earn on your savings for these 18 years is 6% per year. The problem is for you to figure out how much money you will need to put away an the end of each year for 18 years to completely take care of her college expenses given the above assumptions. Since people generally save by the month, figure out how much money you will need to put away at the end of each month for 18 years to completely take care of her college expenses given the above assumptions. Some people save by the week, figure out how much money you will need to put away at the end of each week for 18 years to completely take care of her college expenses given the above assumptions. A newborn child comes into your life, and you decide to start a college fund for this child to draw on when she is 18 years old. You estimate that the annual cost of college (room, board, tuition, fees, and books) will be about $60,000 per year in 18 years. You also figure that annual costs will increase by 3% per year for each of the additional three years she spends getting her undergraduate degree. You also think the average interest rate you can earn on your savings for these 18 years is 6% per year. The problem is for you to figure out how much money you will need to put away an the end of each year for 18 years to completely take care of her college expenses given the above assumptions. Since people generally save by the month, figure out how much money you will need to put away at the end of each month for 18 years to completely take care of her college expenses given the above assumptions. Some people save by the week, figure out how much money you will need to put away at the end of each week for 18 years to completely take care of her college expenses given the above assumptions.

Answer rating: 100% (QA)

SOLUTION To calculate the amount of money you need to put away at the end of each year month and week for 18 years to completely take care of your chi... View the full answer