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(9) Jessica's son who is 8 years will begin college when he is 18 years. The cost of college now is $10,000 per academic year
(9) Jessica's son who is 8 years will begin college when he is 18 years. The cost of college now is $10,000 per academic year and he anticipates that college cost will increase at the rate of 7% annually until his son enters college. He expects to receive 8.9% returns on his investment earmarked for this purpose. If her son will enter college for 4 years, how much money should she save every month to achieve this purpose?
- Step 1: Calculate the cost of college for a year when the child reaches 18 years
- Step2: Calculate how much it will cost her to pay for the fours (looking for the present value and account for inflation)
- Step 3: How much does she have to put down every month to raise the total amount needed to fund her childs cost of college
**Ps.: Please double check your answer. I have been getting wrong answers on here very often. Thanks for your time!**
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