You have two children. One will start college in 13 years and the other in 10 years.
Question:
You have two children. One will start college in 13 years and the other in 10 years. You expect to pay $25,000 per year per child for college. You feel it's your parental responsibility to pay for four years of college, but no more. You plan on saving an equal amount every year (first investment to be made one year from today). The first tuition payment will be exactly 10 years from today, and all tuition payments will be due at the start of the school year for each child. You plan on being done with your savings (investments) when the second child enters school in exactly 13 years (at which point you have to make the first tuition payment for the second child). How much do you have to save each year at year end to pay for your childrens' college education if your interest rate on savings is 8%?