Lets assume that youre preparing for your (future) child (or grandchild)s college education. 20 years later from now, your (future) child (or grandchild) will go to college.

Colleges:

Dartmouth College

MIT

University of Chicago

Estimate the future cost of college for your (future) child (or grandchild) and calculate needed annual savings for these colleges. Please specify your assumptions for the computation of future costs and needed annual savings. To earn the full credit, you need to show the process to get the answer in your report.

1. Please visit the website of each university, find tuition and related information, and summarize this information. Use out-of-state tuition information if the university assigned to you is a state university. Make sure that you include accurate information and citation source in your report (20 points).

2. Calculate the future tuition amount you need for your (future) child (or grandchild) in 20 years. Please make sure that you show how to use a financial calculator or mathematical formula step by step in your report. Using the tuition and related information in Question #1, you need to compound it at a reasonable "inflation" rate for education-related expenses for x number of years. I hope most of you are aware that educational inflation has been much higher than overall inflation in the economy, (You can find tuition inflation statistics from the internet. Use google.com and search for tuition inflation or education inflation) (40 points).

3. Calculate the annual deposit amount needed to have projected future tuition in 20 years. After you calculate the projected cost in Question #2, your next job is to find the annual deposit needed to accomplish the goal - meeting the educational expenses. You must assume the investment rate of return (You can use savings account rate as your investment rate of return, for example)