How much does Andrea need to have set aside today/now to pay for A vears of college for Trevor?

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Jessica is in the market for a new car. She has narrowed her search down to 2 models. Model A costs $23,000 and Model B costs $18,000. With both cars she plans to pay cash and own them for 3 years before trading in for a new car. Her research indicates that the trade in value for Model A after 3 years is 58% of the initial purchase price, while the trade in value for Model B is 27%. Jessica has no emotional attachment to either model and wants to make a strictly financial decision. The interest rate is 7%. For simplicity assume that operating and maintenance costs for the models are identical every year. Which model is the better decision and how much "cheaper" is it than the alternative? College tuition has been rising at a rate of 7% per year. Currently the average tuition of a state college is $10,600 per year. Andrea's son Trevor will begin college in 9 years. Andrea's portfolio is making 2% annually. Jessica is in the market for a new car. She has narrowed her search down to 2 models. Model A costs $23,000 and Model B costs $18,000. With both cars she plans to pay cash and own them for 3 years before trading in for a new car. Her research indicates that the trade in value for Model A after 3 years is 58% of the initial purchase price, while the trade in value for Model B is 27%. Jessica has no emotional attachment to either model and wants to make a strictly financial decision. The interest rate is 7%. For simplicity assume that operating and maintenance costs for the models are identical every year. Which model is the better decision and how much "cheaper" is it than the alternative? College tuition has been rising at a rate of 7% per year. Currently the average tuition of a state college is $10,600 per year. Andrea's son Trevor will begin college in 9 years. Andrea's portfolio is making 2% annually.

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