Simon and Sandra Soh are no different from many young families who are concerned with their finances. In their fact-finding form, they have emphasised the two most important financial goals to you: (1) saving a college fund for their 2 children and (2) having enough retirement fund for themselves.

They wish to save $30,000 per child by the time each one starts college. Their children, Sara and Sophie, are currently aged 10 and 12 years old, respectively. Simon and Sandra have 10 years to save up for Sara and 8 years to save for Sophie.

With little or no idea of how they should plan for their financial goals, they have approached you, a financial planner, for advice on their financial planning matters.

Compute the lump sum needed to achieve $30,000 for Sara and Sophie when they are 20 years old. Calculate the amount required to achieve the $30,000 for Sara and Sophie if Simon and Sandra prefer to invest on a yearly basis.