Two parents plan to pay their child's college tuition starting 17 years from now. The college duration is three years, and the current annual cost is $11 000 per year. The couple expects this cost to rise at an annual rate of 6%. In their planning, the parents assume that they can earn 7% annually. How much should the parents save each year starting next year, if they plan to make 16 equal payments? Answer:

Two parents plan to pay their child's college tuition starting 17 years from now. The college duration is three years, and the current annual cost is $11 000 per year. The couple expects this cost to rise at an annual rate of 6%. In their planning, the parents assume that they can earn 7% annually. How much should the parents save each year starting next year, if they plan to make 16 equal payments? Answer:

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter5: The Time Value Of Money

Section: Chapter Questions

Problem 33P

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