The recorded session, provides a good overview on working this problem.

A couple has just given birth to a baby and named him Jimmy. They want to set up a college savings account for Jimmy and start saving for his college education. The following facts will help you work this problem:

Current Cost of Tuition, Room & Board $25,000

Expected Average Inflation for College Costs 5%

Expected Average Percentage Return on Savings 4%

Years until you need the first tuition payment 18 You will make 18 yearly payments with the first payment starting a year from now.

How much will the couple need at the end of 18 years to fund Jimmy's college education for 4 years?

Round your answer to a whole number.

Question 2

Based on the amount you calculated above, how much will the couple need to save each year in Jimmy's account to reach their goal of having enough money to fund his college education at the end of 18 years? Round your answer to a whole number.