Planning for college so money will be available.
Son will start college in 5 years. Expect college to cost $10,000 per quater, each quaters cost will be payable in advance, and he will attend college all year long. Expect him to complete college in 5 years (20 quarters). Interest rates will be 8% per annum during the time he is in college.
Save for 5 years on a monthly basis, with equal monthly savings payments, at the end of each month. Expect interest rates to be 7% for 5 years of saving.
How much do I need to save each month to have enough money to pay for college without making further payments while he is in college?
The money that we save should be enough to pay for the college. We need to find the amount needed to pay for college and then ensure that our savings at the start of college equal to that amount.
The amount ...
The solution explains how to calculate the monthly savings so that enough amount is available to pay for college costs.