1. Assume the current (4) year cost to attend Park University for tuition and books is $12,500. It is estimated that these costs will grow at a 7% annual rate.
2. The money that you annual set aside to meet this financial obligation is expected to earn an estimated 5% annually for the 7-year period (period from age 10 to age 17).
How much money has to be set aside annually to have the entire estimated 4 years college tuition and book costs by the time your child hits age 17.
1st - Calculate the amount of money that will be need in 7 years that covers the estimated college costs for 4 years of college. You were given a base dollar amount that increases annually at a specific rate.
2nd - Use of the annuity table to calculate the amount of money that's required to be set aside each year to equal the total dollar amount calculated in NO. 1.
Guideline solution for posting number 24984
1. The current cost of $12,500. The cost increases at 7% ...