$3.$ Presently college education is increasing at the rate of $8\%$ per year. If currently college cost is running at $$28,000$ a year, what will the Marcottes need to have saved up for Paloma in $7$ years. Assume that the Marcottes are in the $25\%$ tax bracket, and $6\mathrm{.}5\%$ for the State taxes. Furthermore you can assume that the Marcottes can earn $3\%$ on their investments. You can use a financial calculator or the TVM table or TVM formulas to find answers to the following:

Hints in responding:

When considering the information provided, consider their savings outside of retirement as after tax. $.$

$$ remember to state your calculator keystoke or show your formula components for full credit

$$ assume all rates shown except the inflation rate, are compounded monthly.

o For instance, $84$ months for Paloma time period.

o Check to make sure your interest rate is equivalent

a$.$ How much will they have saved for Paloma assuming they presently can only save $$75$ per month per child for her educational funding by the time Paloma leaves for college?

$4.$ What will be their college savings shortfall $($or surplus$),$ for Paloma?

i$.$ How much would college cost be for Paloma$$s first year?

ii$.$ What is Paloma$$s college cost shortfall? $($or surplus$)(3$ai$-4.$i$.)$

iii. What are some saving programs and tools that the Marcottes might consider to make up the shortfall and to eventually prepare for Joel?