Your five-year-old daughter has just announced that she would like to attend college. Your best guess is that it will cost approximately $25,000 per year (for four years) in tuition, books,

rent, etc. for her to attend State College 13 years from now. You believe that you can earn a rate of 9% on investments to meet this goal.

a. If you were to invest a lump sum today in hopes of covering your daughterís college costs, how much would you have to invest?

b. If you now decided to invest annually instead, how much would you have to invest each year?

c. You just learned of a $10,000 inheritance and plan to invest it in your daughterís college fund. Given this new source of funds, how much will you now have to invest each year? L01