You are 25 years, compute how much you must save annually to reach your financial goals. Here are your assumptions:
• You hope to have a child in the next three years. For your calculations, you assume that at time = 21 (age = 46), you will need to make the first college payment. You will pay for four years, currently, the tuition is $20,000, and you expect it to increase with inflation at 3% per year.
• You want to change your car in 3 years (time =3, age = 28), and you must have $10,000 for the downpayment.
• You want to buy a house in 10 years and have $100,000 for the downpayment.
• You also want to save money for your retirement. You want your retirement payments to be $100,000 annually, starting when you are 66 years old (time = 41). You expect to live 25 years after you retire, so you must receive 25 payments.
You have $5,000 already saved.

Answer rating: 100% (QA)

Solution College Payment Assuming you need to make the first college payment when you are 46 years old and you expect to pay for four years of college ... View the full answer